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%.