One important metric to look for in a stock is an 80 or higher Relative Strength Rating. Cloudflare cleared that benchmark Friday, with a jump from 80 to 86 Friday.
IBD's unique RS Rating identifies market leadership by using a 1 (worst) to 99 (best) score that indicates how a stock's price performance over the last 52 weeks matches up against that of all other stocks.
History reveals that the top-performing stocks typically have an RS Rating of over 80 in the early stages of their moves.
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Cloudflare is now considered extended and out of buy range after clearing a 96.30 buy point in a second-stage cup with handle. See if the stock forms a new pattern or follow-on buying opportunity like a three-weeks tight or pullback to the 50-day or 10-week line.
Cloudflare showed 25% earnings growth last quarter, while sales growth came in at 28%.
Cloudflare holds the No. 5 rank among its peers in the Computer Software-Enterprise industry group. Samsara is the No. 1-ranked stock within the group.
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