Trade of the Day: Don’t Miss Your Chance to Buy CTXS Stock

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Citrix Systems, Inc. (CTXS) — This leading software company specializes in virtualization, mobility management, networking and software-as-a-service (SaaS) solutions.

After gross profit margins narrowed in 2013 and 2014, the company announced a restructuring in January of this year, which S&P Capital IQ said should provide consistency though 2017.

Then, on June 11, Elliott Management disclosed a 7.1% stake in the company’s stock, suggesting “fundamental change[s]” that could increase shareholder value. The activist hedge fund sent a letter to management “outlining a strategic and operating plan” that “could lead to a stock price of $90 to $100+ per share by the end of 2016.” The changes suggested included the sale or restructuring of underperforming businesses and a leveraged share buyback.

Following the news, CTXS stock broke out and analysts began upping their price targets. Stifel Nicholas, which has a “buy” rating on CTXS stock, increased its objective to $95 from $74. Credit Suisse Equity Research raised its target to $85 from $77.50.

After a fall from a high just under $73 in September, CTXS stock consolidated in a bullish “W” formation with a bottom at about $60. On the activist news, CTXS stock broke from that “W” accompanied by a volume spike and a breakaway gap ($66.06 to $69.26). The break was preceded by a golden cross (50-day moving average crossed up through 200-day) and three buy signals from my proprietary indicator, the Collins-Bollinger Reversal (CBR).

Breakaway gaps are often not fully closed. However, a partial close is possible, so I suggest a buy under price of $68. But I encourage long-term buyers not to risk missing a move and purchase CTXS stock at the market. The trading target is $78, and the long-term target is $85.

CTXS Stock Chart
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Article printed from InvestorPlace Media, https://investorplace.com/2015/06/citrix-systems-inc-ctxs-stock-trade-of-the-day/.

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