Chart of the Day: ServiceNow Is Stuck Under a Dark Cloud
Some thought the stock was going to make a big move up, unfortunately it was the other direction.
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Dark Clouds
ServiceNow (NOW) has become the poster child of software/services names. The presence of AI seems to threaten the mere existence of names in this group such as ServiceNow, Salesforce (CRM) , Microsoft (MSFT) and Oracle (ORCL) , to name a few. The jury is still out but the market is speaking loud and clear, the message: We don't believe the growth for cloud-based software or any others of that kind.
When the market sends a message about a stock or group you should take heed, because once the selling commences it becomes difficult to see an off ramp. After a more than 60% drop from December to February, NOW seemed found a bottom and was ready to push back higher.
Yet, as we see in the top chart, that rally from about $100 to $120 never turned the candles into bullish on the GoNoGo composite of indicators; they remained pink/purple, which is bearish. The indicators supporting the price chart are bearish still, MACD is on a new sell signal while money flow just went negative again.
Is NOW oversold? It sure is, but that is no reason to get excited yet. A series of higher highs and higher lows and a bullish formation will start things in the right direction, assuming the AI experts predicting their doom are not correct.
We like ServiceNow 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.
