Chart of the Day: A Portfolio Holding Finds Its Way Back to Familiar Territory
The channel we put in place back in September attracted the stock to the price area.
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With that big candle in November following lights-out earnings we would have thought a continuation rally would ensue. Yet, that was not the case for Elastic N.V. ESTC which has now moved downward into a rather "safe" channel, where the stock was moving upward from early September.
We call it safe because it is a zone where buyers come in to pick up the stock on the dips. Elastic did push out above that channel but now shows a rejection of that breakout a month later. We suspect a test of the lower end of the channel is coming soon, call it the $92 area (and rising). We would suggest adding shares if this lower band is tested (arrow on the chart, top pane)
Indicators are weak, though, the stochastics very oversold, while money flow has been mostly bearish for a couple of months. This is why the stock could not continue on in late November, but regardless the longer-term trend is up and still intact.
We like Elastic in TheStreet Pro Portfolio and rate it a One, or "buy at anytime."
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At the time of publication, TheStreet Pro Portfolio was long ESTC.
