Traders are viewing the recent market selloff as an opportunity to buy tech stocks on the dip, with CrowdStrike (CRWD) among the names drawing attention. Cybersecurity giant Palo Alto Networks Inc (NASDAQ:PANW) also presents an intriguing opportunity, as the stock just pulled back to a trendline that has historically produced positive returns.

According to Schaeffer's Senior Quantitative Analyst Rocky White, PANW stock is now within striking distance of its 260-day moving average, a move that has typically resulted in positive returns. This follows a prolonged period above this trendline (defined by White as 80% of the time in the past two months and eight of the last 10 trading days). A similar move occurred five times in the last three years, after which the security was higher one month later each time, averaging a 10.7% gain.

 

 

PANW was last seen up 3.9% to trade at $180.57, so a move of similar magnitude would set it just shy of the $200 level, nearly closing the pullback from its Feb. 19, all-time high of $208.19. Longer term, Palo Alto Networks stock still sports a 27.1% year-over-year lead.

 

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day call/put volume ratio ratio of 2.28 ranks higher than 93% of annuals readings. This indicates options traders have been much more bullish than usual in the last 10 weeks.

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