NTAP has a bullish long-term trend and fundamentals, but is technically overextended; entry is preferred on a pullback to the 20-day moving average (~$220).

You have NetApp, whose stock hit an all- time high and received an upgrade from Evercore ISI with a new, extremely high target price.

This company is no stranger to this sector. It has been working for 30 years to help companies store, protect and manage massive amounts of data. Therefore, my thinking in these deals was focused on finding alternative ways to leverage artificial intelligence, beyond just thinking about Nvidia, Microsoft, or some semiconductor chips.

They all need chips, that's understandable, but what about where to store the data? This is where NetApp comes in. Well, these companies help businesses—such as hospitals, banks, and government agencies— store massive amounts of data that they need to store and possibly keep for a long time, and that's where NetApp comes in.

Technically, the stock is in an upward trend, tracking the 10-day moving average with bounces to around the 20 level, which has been acting as support since June. Therefore, I am impressed with the long-term upward trend.

Up to now, the 20 level has been largely predictable with bounces and pullbacks, then the stock has moved upwards using the 10-day moving average. Therefore, it provides some really good technical indicators.

I mean, since the beginning of the year , NetApp stock has risen by almost 120%, but are you following the same moving averages here or are you looking at something different?

no. I mean, look, it's an upward trend, and if we look at the chart on a daily timeframe for a year, we'll find that this stock has made lower highs and lows at this time last year.

We were able to reach the bottom almost at the $93 to $95 level. We experienced a period of consolidation for approximately two and a half months, then we started to rise. This is where the enthusiasm began, and the trading volume increased significantly.

We saw an upward gap last June. Then there was a period of consolidation for about a month and a half , then we started to rise again. We reached the $207 level , then we held firm again, taking advantage of the 50-day moving average as support, and continued to climb, and now we are recording these peaks.

Therefore, in the end, the stock makes higher highs and lower lows .

As you can see, the momentum of this stock is still strong. We do not observe any decline in any of the indicators we focus on daily. Therefore, this stock is generally considered to be in an upward trend.

However, if a sharp peak pattern forms as a result of the rapid movement, a pullback to approximately $207 is expected, which is the level at which the stock must stabilize to maintain this upward trend.

If the price falls below the 20-day moving average , and then below the 50-day moving average, then we expect a sharp drop towards the 200-day moving average . Looking at the weekly chart, we find that it is still bullish.

We observe periods of consolidation, followed by a continuation of slight increases. The only thing I would point out in the three-year weekly chart is the trading volume. The data here is somewhat weak with regard to price movement and trading volume over the past two weeks.

Therefore, keep in mind that the trading volume is not sufficient to support the price movement, but if the enthusiasm continues, this stock may continue to rise.

I am relying on 43 days. Almost all options extend into November at this stage. When I look at this stock, and because it is slightly overextended from the 10-day moving average , and I would like it to get closer to the 20-day moving average before making any decision, I consider it to be in decline, but I am still impressed with it.

Direction is the solution. So, what I'm going to do here is look at the expiry date of November 20, 2026. I'm going to sell the put option at an execution price of 220. I checked that earlier this morning.

It cost $8.50. So, you know, if we do the math, for every $22,000 invested, you can withdraw $850, but you may not need to invest that entire amount, because you will only have to buy the stock if its price drops to $220.

If it drops to $220, that price is very close to the 20-day moving average, which is a price bounce level. Therefore, I would be satisfied if I were offered the stock at $220, but if I got $8.50 for it, I would actually be below the $220 level when I entered the deal.

That's what I like. If I have to own the stock, it pays dividends, but I can also sell call options outside the price range. This is how I will handle this stock. Obviously, if the price falls below the 20-day moving average, we will have to reassess, but even so, I will get a profit margin of $8.50, and I can then sell call options against this position.

Therefore, I prefer to be in a position that allows me to make a profit whether the price rises, stabilizes, or even falls. If it declines, I will get a return on buying a stock that I would have bought at my preferred price anyway, but at a slightly lower price. I think it's a win-win situation .