ServiceNow (NOW) has a stock symbol that could be used in an Abbott and Costello skit (think about it), but seriously, it has had a nice rally so far this year. Can it keep going to higher ground? Let's look at the charts and indicators.
In this daily chart of NOW, above, we can see a pretty dramatic V bottom pattern. As prices dove down in January, we can see a measuring gap (sometimes called a runaway gap). Prices have recovered very nicely from the February low.
The On-Balance-Volume (OBV) line has turned upward, signaling that buyers of NOW have become more aggressive with the volume of shares traded heavier on days when NOW has closed higher. NOW is above the rising, 50-day moving average and above the still-declining, 200-day average line.
There is a small bearish divergence between the higher price highs in May and June compared with lower momentum readings. This bearish divergence may translate into a shallow pullback to around $68 and more sideways price action. If we continue to see the OBV line rise, we should eventually see NOW challenge the resistance in the $85 to $91 area.
In this weekly chart of NOW, above, we can see that it is above its 40-week moving average. The OBV line on this timeframe is moving up, supporting the price advance. The trend-following Moving Average Convergence Divergence (MACD) oscillator generated a cover-shorts buy signal and is near to crossing above the zero line for an outright, go-long buy signal.
Strategy: Traders looking to go long NOW, wait for a dip just under $70 and then risk to $65.