Business Day: Falling to Earth (Technical Analysis) (NASDAQ:WDAY)

Labor Day, Inc. (Nasdaq: day) The stock appears to be in big trouble after the payroll and HR software developer lowered its subscription revenue guidance as global corporate macro trends weigh on expectations for the company’s future performance.

During the first quarter period, Workday reported revenue of $1.99 billion (beating consensus estimates of $1.97 billion) while subscription revenue was $1.82 billion (indicating growth rates of 18.8% during the period. Unfortunately These positives have failed to extend much further, as the company now expects a decline in subscription revenue ($1.9 billion) for the current quarterly period (which is roughly in line with prior market estimates for the current period).

However, Workday also expects a decline in full-year numbers for subscription revenue (which sets a potential range of $7.70-$7.73 billion) and the guidance midpoint is here It ultimately falls below the company’s previous range forecast ($7.73-7.78 billion) and below the $7.76 billion figure previously reported in consensus estimates. Overall, these numbers have had a clear negative impact on what appears to be an incredibly weak stock – and we’ll outline the history of chart patterns that make these assertions clearer to investors using the following charts.

Initially, we can see that WDAY was in a clearly defined downtrend on the short-term charts, and this tells us that the broader market’s hopes for a positive surprise were limited even before the actual earnings release was announced. Unfortunately, these initial fears were eventually realized, and WDAY stock prices quickly fell to levels near $220 after the quarterly performance was announced. As this happened, the Bollinger Bands on the 4-hour chart expanded widely – effectively indicating that the outlook for trading ranges in this stock may become more volatile in the future.

If the bearish arguments ended there, we might not feel the need to describe this stock as “bottoming out” – however, long-term price histories suggest that these recent declines may just be an early precursor to potential selling pressure that could unfold from here. Specifically, we will draw the reader’s attention to the weekly charts, which show the failure of the price channel in the recent uptrend we have identified for this stock. If we watch the price action from the October 2022 lows of $128.72 and extend this uptrend to the February 2024 highs of $311.28, we can see that a well-defined uptrend channel has been created. In many cases, this type of price action is very encouraging – and a strong guide to start looking at long positions in stocks. However, we can see that stock prices are unable to maintain this structure for very long (and we will see that these types of weak behaviors have occurred in the past when we look at the history of the following charts).

Looking at the previous price action on the WDAY weekly charts, we can see several interesting developments. Perhaps most glaring is the repeated inability this stock has shown in terms of wanting to maintain a proper uptrend channel. Additionally, we can see that large portions of the market have been pulled back at the lows, only to find the stock poised to fail again – at relatively predictable price levels. If we look at the stock price rally that began in early 2020, we can see that prices ultimately failed during the final recovery event (peaking in November 2021) – and this failure occurred at a price point that was expected to perform the same way. Support area during the initial uptrend. In “textbook” terminology, this type of behavior is usually referred to as a failure of support that has turned into resistance, and indicates the possibility of similar activity occurring again in the future. Unfortunately, this activity seems to have become a “pattern of behavior” since we have seen the same type of failure on more than one occasion. In our view, this kind of repeated bearish behavior (and a clear inability to maintain a sustainable uptrend channel) would be enough to start selling the stock on rallies.

As always, we will conclude our analysis with wider time frames as this allows us to identify where the majority of market momentum actually lies. When we turn to the monthly WDAY charts, we can see that there is a clear line in the sand which can be used to determine the bullish/bearish position of this stock. When we are dealing with such long time frames (and such time frames have a large number of support and resistance levels) This is not a level that can be defined in precise terms and looking at the chart example above, we will identify the $210.50 area as our pivot point, which ultimately means that a break of the $210.50 level would likely force prices beyond the $200 level (which would not be Well enough to act as a psychological support) and will act as another indicator of the stock’s failure All of this should be a major red flag – but if you are a bull on this stock, you can try to “resist the trend” and create contrarian buy positions near $215 and count. On the reflection of market sentiment, given all this analysis, we do not recommend this outlook because this stock has shown no prior history of establishing itself as a sustainable bullish option. In our view, investors could sell this stock now (in anticipation of past uptrend violation behaviors). ) or wait for more favorable sell levels near the April 2024 lows at $241.14 for your short positions.