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Alarm Bells Ring On FireEye Inc

|Includes: FireEye, Inc. (FEYE)

There is definitely a fire at FireEye Inc (NASDAQ:FEYE). This internet security firm posted earnings that beat expectations but lowered guidance going forward. The market is punishing high beta stocks like FireEye Inc if they do not have 100% amazing results, all the way around. Any small slip up is being used as a reason to dump the stock and rotate money into safer equities that pay dividends. This rotation of capital is punishing FireEye. This stock hit a all-time high of over $97.00 per share in early March 2014. Today, less than two months later, FireEye Inc is trading at $27.36.

So the big question has to be asked, where is FireEye Inc (NASDAQ:FEYE) heading? Is it going lower, higher or staying in this range. This is one of the toughest charts I have had to read in quite some time, mainly because FireEye has never traded this low since it debuted on the NASDAQ. The easy call is the long term. Everyone knows that internet security and software is where the next epic war will be fought. This puts FireEye Inc in a great position long term to excel and grow. However, in the short term, if the markets continue to be anti high beta names, it could float lower. While I like the play and have some shares I would encourage investors to look at the longer term view to see the value here. Note the sector FireEye Inc is in and realize down the road that every big battle will be eventually fought in cyberspace.

Gareth Soloway