Chart of the Day: Is ServiceNow Finally Bottoming?
This cloud-based software company has been in the crosshairs of AI disruption. Here's what the chart is telling us.
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It is not bad enough that ServiceNow (NOW) had been slumping, but when you pour on bad news from the sector (software in trouble due to gains in AI) then you start to worry about viability and sustainability. Everyone has heard about the potential disruption of AI for different segments of the economy, and software is right in the crosshairs.
ServiceNow had come under assault by sellers in the fall, as volume trends were just starting to get bearish. Recently, high-volume selling has been the activity for investors, and perhaps this is where this stock makes a bottom. Why is that? Basically, if the bigger investors in this stock who are sporting a loss decide to throw in the towel, that often means a bottom is at hand.
Of course, that won't be determined for weeks if not months.
ServiceNow needs to build a nice long base, attract big money/long-term investors and then show some good earnings.
Money flow is starting to improve, MACD (moving average convergence divergence) is trying to push up to a buy signal but clearly this is just re-positioning as the chart is still bearish.
We still like ServiceNow for the long term 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 NOW.
