Digital music service Spotify (SPOT) is used by more than 400 million people every month. We've come a long way from a simple AM radio at home or in your car.
Despite the company's progress, SPOT stock made a significant decline in 2021 and 2022. Have prices now made a base that can support a new and sustained uptrend? Let's check.
In my March 24 review of SPOT I wrote that "the charts suggest that a downside price correction is possible."
In the daily bar chart of SPOT, below, I can see a long sideways trend the past 12 months. The shares have worked higher since my March 24 review but the indicators remain cautionary. SPOT is trading around the 50-day moving average line and just slightly above the 200-day line.
The On-Balance-Volume OBV) line is weakening and the Moving Average Convergence Divergence (MACD) oscillator is just slightly above the zero line.
In the weekly Japanese candlestick chart of SPOT, below, I see a "so so" picture. Prices trade above the 40-week moving average line.
Trading volume has been decreasing suggesting a lack of investor interest. The weekly OBV line has moved sideways the past two months. The MACD oscillator is just slightly above the zero line.
In this daily Point and Figure chart of SPOT, below, I can see an upside price target in the $156 area. A trade at $126.18 could weaken the picture.
In this weekly Point and Figure chart of SPOT, below, I can see an upside price target in the $237 area. Impressive.
Bottom-line strategy: SPOT is not anticipated to report earnings until April 25. I don't know if it will be bullish or bearish. If you are long or looking to go long I would have a stop at $125.
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