Leading cloud-software stock, Dropbox Inc (DBX), has been under selling pressure since early August. At that time, the stock traded as high as $33.00 a share. Since that pivot top, the shares have fallen down to around the $28.00 area. Like many other leading tech stocks, Dropbox Inc (DBX) stock is now trading below the important 50-day moving average. This obviously puts the stock in a weak technical position on the charts. Please note, the stock is still holding above the 200-day moving average, but that important moving average is now just minor support. The stock continues to look weak and further downside is likely in the near term.
The next major support level for Dropbox Inc (DBX) will be around the $25.00 area. This key support is where the stock broke out to the upside in March 2021. Often, prior breakout levels will be major support when retested. The stock also has important retrace levels in this area adding strength to the $25.00 support level. I will be looking at a long side trade around this key area.
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