Fastly (FSLY Stock) entering the blue box

Fastly Inc is in the cloud computing business, and has had a major rally from the March 2020 low before peaking for a large degree correction in September 2020.  Lets take a look at what the company does and see what the charts say about the future of this company.

“Fastly, Inc. is an American cloud computing services provider. Fastly’s edge cloud platform provides a content delivery network, Internet security services, load balancing, and video & streaming services. Fastly’s headquarters are in San Francisco, California, with additional offices in Denver, New York, Portland, London, and Tokyo.

Fastly describes their network as an edge cloud platform, which is designed to help developers extend their core cloud infrastructure to the edge of the network, closer to users. The Fastly edge cloud platform includes their content delivery network, image optimization, video & streaming, cloud security, and load balancing services.

Fastly’s cloud security services include distributed denial of service (DDoS) attack protection, bot mitigation, and a web application firewall. Fastly web application firewall uses the OWASP ModSecurity Core Rule Set (CRS) alongside its own ruleset.”

Lets dig into the charts!

Long term term view from 3/16/2020 lows of 10.54. This stock is favoured to be correcting the whole cycle since the March 2020 low (all time low).  Wave ((1)) is set at 46.35 on 5/22/2020 and wave ((2)) at 36.03 on 4/27/2020.  After that, an extended Black ((3)) took place, which peaked on 10/13/2020 at 117.79.  From there, Black ((4)) at found a low on 9/04/2020 @ 71.39.  After that, one final rally took place into Black ((5)) of Red I is favoured peaked  10/13/2020 at 136.50.

After the Red I peak, a sharp pullback took place for ((A)) which saw the stock price take a 50% haircut in under a month.  ((B)) bounce peaked in January 2021, and now the stock is working on the final ((C)) decline.  There is a blue box extreme area that the stock can bounce from.  This is an area where Algo’s are programmed to react to the equal leg measurement for ((A)) and ((C)).    Even though prices are in the box, the sequence still has more room for further declines.  A couple more lows are favoured to take place before a longer term low can materialize.

In conclusion, more downside can take place, but selling short the instrument down here in the hole is not a favourable trade.  Moreover, shorting at a blue box where buyers may enter for a bounce, can be extremely risky.  The all time low of this stock is 10.38, prices are not able to invalidate this low in order for this count to remain intact.