This morning, leading cloud software stock, Citrix Systems Inc (CTXS), reported earnings before the opening bell. The stock is coming under heavy selling pressure trading lower by 9.0% to $152.10 a share. It should be noted that yesterday shares of CTXS traded as high as $173.56 which was an all time high. This tells me that the stock was priced for perfection going into its earnings report.
Today, the stock has declined to it’s 20-day moving average. This level seems to be short term support for the stock this morning. Often, when a stock declines this sharply it will ultimately trade lower before it is truly defended by the institutional crowd. Traders should watch the $140.00 level for major chart support. Please note that this is a very solid support area that should be defended when initially tested. This is also where the stock broke out to new highs after forming a 3-month sides base. It is important to remember, when prior break-out levels get retested they will usually hold up and see institutional sponsorship.