A look at NetScout Systems

Posted by downtowntrader | 3/21/2010 10:59:00 PM View Comments

Even though futures are down as I write this, and the markets looking like they are ready to take a breather, I continue to build my watch list with stocks that are strong and look poised to move higher. The markets remain in good shape from a technical standpoint and many stocks continue to look pretty solid.

NetScout Systems, Inc. (Public, NASDAQ:NTCT) is a pretty good example of the types of chart setups that have been working pretty well lately. NTCT cleared a base in December, but settled into a second base just above the breakout area. It has been trading in a tight range recently just under $16 and is pulling into its rising 20 and 50-day moving averages. There is also a rising trend line it has been following for several months that is clustered along with the moving averages. I think NTCT would be very attractive as a swing trade on strength that would carry it above $15.80.
While I don't usually get into fundamental reasons for trades I am looking at, I happen to like the space NTCT is in and I think there is a good story there for continued demand. NTCT has developed a product line that helps companies optimize and monitor bandwidth in complex environments. Their nGenius product is widely used and the need for this type of product is only getting larger. Everything from increased Mobile data traffic, converged Networks and Cloud Computing relies on an increased demand for not just raw bandwidth, but high availability which increases complexity. Again, these are not the reasons I am looking at NTCT, but those with longer time frames than I should take a deeper look at this company as well, as I think there is potential for continued demand for its products.

Good Trading,


blog comments powered by Disqus