Workday Inc. (WDAY) is scheduled to announce its fiscal fourth-quarter results after the market close Thursday. Let's see how the charts and indicators are positioned ahead of the numbers.
In the daily bar chart of WDAY, below, we can see that prices made a low in mid-October and rallied into February. Prices abruptly turned lower with the broad market and have closed below the 50-day moving average line and the slower-to-react 200-day moving average line.
Trading volume increased on the recent decline and the On-Balance-Volume (OBV) line has turned lower telling us that sellers have turned more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside in positive territory generating a "take profits" sell signal.
In the weekly bar chart of WDAY, below, we can see that prices made a strong rally into a mid-2019 peak. The stock made a correction and then had a recovery rally that just ran out of steam. Prices are now below the declining 40-week moving average line.
The weekly OBV line has started to turn down from a lower high than seen in 2019. The MACD oscillator had recently crossed above the zero line but has begun to narrow, telling us that the strength of the trend is weakening.
In this daily Point and Figure chart of WDAY, below, we can see that a potential downside price target of $148 is being projected. This would be a retest of the 2019 lows.
Bottom-line strategy: Putting aside the earnings report after the close Thursday, the charts of WDAY have weakened. Avoid the long side for now. A retest of the $150-$148 area could be a buying opportunity at the end of the first quarter or the early part of the second quarter.
