FTC Pours Cold Water on Sizzling Adobe
After jumping higher on Friday, the shares declined Monday on reports the company is in the crosshairs of the Federal Trade Commission.
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The Federal Trade Commission (FTC) is reportedly targeting Adobe ADBE over their subscription plans practices. The stock is trading lower and giving back some of its sharp gains of last week. On Friday ADBE gapped higher after a "solid quarter" and an upgrade by JPMorgan JPM.
Let's check on the charts and indicators.
In the daily bar chart of ADBE, below, I can see that prices jumped higher on Friday as noted above, before declining on Monday. ADBE stopped short of a test of the underside of the 200-day moving average line. ADBE is still above the bottoming 50-day moving average line.
The On-Balance-Volume (OBV) line has been weak since the middle of December. The Moving Average Convergence Divergence (MACD) oscillator has moved up to test the zero line.
In the weekly Japanese candlestick chart of ADBE, below, I can see last week's large white (bullish) candle. Prices stopped short of the underside of the declining 40-week moving average line.
The weekly OBV line has been chopping sideways the past year. The MACD oscillator is below the zero line but narrowing.
In this daily Point and Figure chart of ADBE, below, I can see an upside price target in the $535 area.
In this weekly Point and Figure chart of ADBE, below, the software is projecting a price target in the $721 area.
Bottom-line strategy: I have no special information about the FTC actions but potential buyers of ADBE stock need to be aware of this. Will ADBE give up the gains of last week? Probably not but some sort of retracement is underway.
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