For his second "Executive Decision" segment of Mad Money Friday night, Jim Cramer spoke with Aneel Bhusri, co-CEO of Workday (WDAY) , the human resources software company that just posted strong quarterly results. Shares of Workday fell Friday along with the broader markets.
Bhusri was bullish on the outlook for Workday in 2021. He said they expect bookings to accelerate as the economy recovers, although it may take some time for the growth to appear in their subscription accounting model.
Bhusri said the key to thriving in the pandemic has been the ability to adapt quickly to the changing landscape, and that's what Workday's platform allows companies to do. Employers are desperate to assess their employees' happiness and engagement in our new work-from-home world and Workday's pulse surveys are just one tool that's now available to them.
We looked at WDAY back on November 20 and wrote that, "The charts of WDAY look promising but equilateral triangles can be tricky as the visible pattern of a bar chart shows a balance between bulls and bears. The Point and Figure chart is bullish but I would only buy strength as long as the broad market struggles. Aggressive traders could go long WDAY above $239 risking a close below $220 looking for gains to the $275 area."
Traders would have finally gotten long WDAY in the second half of December and the rally to the $283 area would have given you the opportunity to take profits.
Let's check out the latest charts and indicators.
In this daily bar chart of WDAY, below, we can see that prices have pulled back recently to test the 50-day moving average line. The On-Balance-Volume (OBV) line rolled over last month and the Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profit sell signal.
In this weekly bar chart of WDAY, below, we see a weakening picture. Prices are still in an uptrend above the rising 40-week moving average line but that may not last for long.
The weekly OBV line shows weakness since August suggesting that aggressive sellers have been more dominant.
The weekly MACD oscillator has struggled since October and is poised to cross to the downside for a weekly take profit sell signal.
In this daily Point and Figure chart of WDAY, below, we can see that the software is projecting a potential or possible downside price target in the $208 area
Bottom line strategy: Prices are likely to bounce to the upside this morning but the peak made around the middle of February is likely to stand for a while. I don't know if prices will in fact decline to the Point and Figure target of $208 but I would be prepared for a deeper correction unfolding in the weeks ahead.
