Leading software and data stock, Splunk Inc (SPLK), sold off sharply after reporting earnings late last week. The stock tumbled by more than 20.0% after the earnings report disappointed investors. Splunk Inc (SPLK) had reported two consecutive quarters of losses due to the pandemic, analysts had been expecting a return to profitability in Q3. Management did not provide EPS guidance for Q4. The stock is now trading below its important 200-day moving average. This puts the stock in a weak technical position on the charts in the near term.
One level that traders should watch for support would be around the $145.00 level. That is still another 10.0 points lower than where the shares trade today. This major support level is a major retrace area from the March 2020 lows to the 2020 top. It is also a major breakout level from early May 2020. These factors should be enough for a solid bounce level for Splunk Inc (SPLK) stock when tested. I will be looking to be a buyer around that key support area.
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