Chart of the Day: This Tech Holding May Be Due for a Rest
The stock has not pushed above the September highs, which tells us buyers are absent.
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With earnings out later in the week from TheStreet Pro Portfolio holding ServiceNow NOW, we expect to see strong numbers and guidance. But how much of those positive results are already priced into the stock? Today, NOW sits just under the all-time highs, achieved twice, in late September and mid-October.
But the problem here is the creation of what is known as a double-top, which implies buyers are just not interested in buying this stock at higher levels. That is often a lead up to a bearish move, as we know if stocks are not going higher, they are probably going lower.
Is that a "death knell" for ServiceNow? Of course not, but after such a massive run from early June to current levels (about 50% gain) the stock may be due for a rest. Parabolic SAR (stop and reverse) just turned negative, right at the all-time highs; that is bearish. MACD (moving average convergence divergence) turned down too, and money flow is also bearish.
Where might NOW fall to? We could easily see a 5-7% pullback, but that could be a nice place to add more shares (roughly $850-$875).
We rate ServiceNow a Two in TheStreetPro Portfolio.
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At the time of publictaion, TheStreet Pro Portfolio was long NOW.
