Splunk specializes in creating software for analyzing machine-generated big data. Its software can search, monitor, and analyze this data through a Web-style interface. Big-data analysis is a mission-critical activity for many businesses, and therefore, Splunk enjoys moat-like high customer switching costs. Ninety-two companies out of the Fortune 100 are Splunk customers, and the company is a leader in its segment. Big data is only going to get more prevalent, and Splunk’s long-term growth prospects are bright.
The monthly chart for Splunk shows a clear uptrend where prices have respected the bottom of the long-term trend. The March 2020 crash was the only time when prices went briefly below this trend. Since that crash, prices rose to all-time highs of $225 in September 2020 before falling almost 50%. In April 2021, the price seems to have found support at the bottom trend line and has now bounced back up. The $173 level is the initial target as it could act as resistance. The longer-term target is $225. A minimum stop loss can be placed below the bottom of the long-term trend, at $128.
Position entered into our long-term tracking portfolio today. The entry point is $132.39, and a stop-loss placed at $92.68, which is 30 % below the entry point. The short-term to medium take profit is set at $178.66, giving a profit of 35%.
On the video and images above you will see the reason this stock was selected.
You will see the image is of a monthly chart of the stock showing the long-term upwards trend formed over the years. You will also see the entry point and the where the stop loss is placed. For more information please watch the video given.
Once it is time to move the original stop loss up you will see an additional image.