Chart of the Day: Is Now the Time for This Portfolio Name?
The stock is showing good support just below current levels as a base-building process begins.
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It's been painful to hold ServiceNow NOW as it falls from recent highs. Notable, though, was a double top formed just before earnings were released in January, then a nasty spill that nearly lost all gains from the prior two months. However, the stock landed at the 200-day moving average, which is often very good support from past instances.
Currently we see ServiceNow trying to build a base at what appears to be a solid bottom. We believe that to be true here (barring any adverse news) because each attempt to break below $970 (a key level) was a buying chance.
Notice the ADX (pane 3), which is starting to decline, meaning the average price movement is coming down as the current trend (down) is ending. We can see that as well with a lack of momentum (stochastics, pane 4) and a drop in money flow.
Investors are just disinterested in this stock at this time, which is not bearish (nor bullish). A process of base-building is underway and could take weeks to finish, but if NOW stops retreating it will be a positive.
At the time of publication, TheStreet Pro Portfolio was long NOW.
