RedHat Software (RHT) is a resilient company that has been around since the dotcom days of the go-go 1990’s. They have persevered, changing with the environment, and now they are thriving in the new cloud space with some great offerings and services. Last week, they once again beat estimates and guided earnings and offered a huge buyback of stock. Accordingly, the stock rocketed higher and closed at a multi year high.
The current chart and technicals are in great shape, and thought it appears to be overbought on the daily chart, there seems to be more room to rise. The uptrend line is in place, and we can see the high volume surged on earnings in December and just last week. The MACD is still on a buy signal, though the momentum indicators are hot and may indicate a slight pullback is due – but it will likely be shallow and just another buying chance.
We had a superb win last week with this name and rolled it up to the May 75 call strike.