We last wrote about Workday (WDAY) on June 1, concluding, "Bottom line: A strong close above $80 with strong volume will go a long way to making the charts of WDAY look more bullish." Recently, WDAY did eke out a close just above $80 on a little over 3 million shares, neither of which met our conditions for a breakout. What do the charts suggest now?
In this updated daily chart of WDAY, above, we can see the brief thrust above $80. Prices are above the rising, 50-day and 200-day moving averages. The On-Balance-Volume (OBV) line is flat -- and definitely not leading prices on the upside. The 12-day momentum study is not displaying any positive or negative divergences at this time.
In this three-year weekly chart of WDAY, above, we see that prices are still over the 40-week moving average line. One big change from Jun. 1 is that the weekly OBV line has made a new high -- and could be foreshadowing new price highs soon.
The Moving Average Convergence Divergence (MACD) oscillator is now above the zero line for an outright go-long signal. Our strategy now would be to go long WDAY on a strong close above $81 with volume ideally above 5 million shares. I think we had the right idea, but the wrong trigger point.