ServiceNow (NOW) has corrected lower in the last few weeks, but this pullback may be over and prices could soon resume their uptrend.
Let's check the charts and indicators.
In this daily chart of NOW, above, we can see a good advance over the past 12 months. There have been corrections along the way -- in June and December and currently in March. Prices made a peak in February and are below the 50-day moving average line but still above the rising 200-day average line. NOW touched or tested the 200-day line in late December and it was a buying opportunity in hindsight. The On-Balance-Volume (OBV) line rose steadily the past year and signals aggressive buying. In the lower panel is the 12-day momentum study, which shows a small bullish divergence this month with higher momentum lows compared to lower price lows. This bullish divergence might lead to the end of the correction and a fresh move higher.
In this three-year weekly chart of NOW, above, we see prices are above the rising 40-week moving average line. The weekly OBV line is positive from early 2016 but looks more neutral in recent months. The MACD oscillator has been in bullish territory since August but just crossed to a liquidate-longs sell signal.
In this Point and Figure chart of NOW, above, we can see the pullback from $94 (column of O's). Prices have some chart support in the $83-$81 area. A rally back to $90 is needed to reverse this chart into a positive direction.
Bottom line: Price strength is needed to tell us the March correction is over. I would wait for a close above $90 to go long, risking to $83.
