The software that Splunk (SPLK) makes is used for monitoring and searching through big data. The company reported a quarterly loss that came in significantly narrower than what analysts had predicted. Splunk also announced that Gary Steele had been appointed as new chief executive of the firm, and to the board of directors, effective April 11.
The share price of SPLK is up Thursday, but the big question is where can prices go from here? Let's check the charts and indicators.
In this daily bar chart of SPLK, below, we can see that prices made a "life changing" decline in November. Prices made a slight new low in December and a retest in late January. Trading volume appears a bit more active the past three months. The On-Balance-Volume (OBV) line has moved sideways to slightly lower suggesting that traders have yet to become aggressive buyers of SPLK. The Moving Average Convergence Divergence (MACD) oscillator has been hugging the zero-line and not showing us much in the way of trend strength.
In this weekly Japanese candlestick chart of SPLK, below, we find a less than exciting picture. A clear bottom reversal pattern is not visible but we can see some upper shadows the past two months. The 40-week moving average line has a negative slope. The OBV line declined into late January and has yet to make a spirited recovery. The Moving Average Convergence Divergence (MACD) oscillator
is trying to turn upwards for a cover-shorts buy signal.
In this daily Point and Figure chart of SPLK, below, we can see a potential upside price target of $151.
In this weekly Point and Figure chart of SPLK, below, we can see an upside price objective in the $155 area. Not much better than the daily chart.
Bottom line strategy: SPLK is higher on the day but off its best levels, which is an early indication that prices are not likely to have much carryover buying from here. SPLK really needs a bigger base pattern to generate a sustained move higher. There are more attractive looking stocks.
