We reviewed the charts and indicators for ServiceNow Inc. (NOW) at the end of August, and our conclusion was, "It looks like NOW is making its move to new high ground. Approach from the long side risking a close below nearby support around $104 targeting the $130-$135 area." Looking back at the price action from the end of August we can see that our $104 stop loss order was never touched and prices just reached the bottom end of our $130-$135 target area. An updated strategy is in order because our price target has been reached and as Microsoft (MSFT) could be looking at NOW. I will leave the possibility of a takeover bid to others and just concentrate on the charts and technical indicators.
In this updated daily bar chart of NOW, below, we can see that prices are still above the rising 50-day moving average line. The slower-to-react 200-day moving average line is also rising and was last tested back in late December.
The daily On-Balance-Volume (OBV) line has been neutral since June, but recently started to edge higher. A rising OBV line is a signal that buyers of NOW have turned more aggressive. The trend-following Moving Average Convergence Divergence (MACD) oscillator is turning upwards to a fresh outright go-long signal.
In this weekly bar chart of NOW, below, we can see all of our favorite indicators are in a bullish setup. Prices are above the rising 40-week moving average line. The weekly OBV line has moved up to a new high, confirming the new price highs. The MACD oscillator is in a bullish mode.
In this Point and Figure chart of NOW, below, we can see the recent upside breakout and a potential upside price target of $145.29.
Bottom line: NOW is still in an uptrend and should be traded from the long side. Go long NOW on any weakness towards $125. Risk below $115 and look for gains to $135 and then $145.