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Cloudfare (NYSE: NET) dated 30 Mar 2022

NET Daily, 12-mth

Cloudflare (NET) engages in the provision of cloud-based services to secure websites.

It offers various products for performance and reliability, video streaming and delivery, advanced security, insights, cloudflare for developers, domain registration and cloudflare marketplace. It derived its business mainly from U.S., which occupy 52%, followed by Europe 26% and Asia 15%.

Cloudflare reported very good Q4 revenue growth of 54%. It has highly scalable architecture and a culture of strong innovation and should continue to add new customers and grow its revenue at a healthy rate. With the increase awareness of cyber-crimes, there should be increasing demand in the services that firms like Cloudflare provides.

Technical analysis wise, since January, its share price had been consolidating into a Double Bottom formation. Expanding traded volume during this period seem to indicate possible accumulation of shares, adding conviction to its breakout above the neckline of the formation. We are also seeing MACD divergence from its share price which usually signify possible trend reversion. Since the prior trend is down, it is likely that this could imply a change to uptrend to come. Furthermore, its share price had been hovering around 250-days Moving Average, a long-term support level.

Short-term support for Cloudflare is at $100 and more significant support is at $80. Next resistance level is at $140, followed by $200.

As usual, this writeup was broadcast to Clients on 30 Mar 2022 but posted here only on 5 Apr 2022.

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