Mucci explained that many businesses are waiting to learn what actions the government is taking to assist them before they make any labor decisions. In a recent survey, Paychex found 50% of customers are seeing minimal impacts thus far, with only 40% expecting some layoffs as a result of shutdowns.
As for Paychex itself, Mucci reminded investors that 50% of their revenue stems from non-payroll services.
Let's visit with the charts of PAYX, virtually and not in person. We looked at PAYX on Monday but with the speed the markets have been moving a fresh look is a good idea.
In the daily candlestick chart of PAYX, below, we can see that prices declined swiftly in the past six weeks and have nearly corrected 50%. The lower shadows of the candles last week show lower shadows below $50, telling us that traders and investors rejected those low prices.
The daily On-Balance-Volume (OBV) line looks like it has improved in recent days and the Moving Average Convergence Divergence (MACD) oscillator has narrowed and moved closer to a cover shorts buy signal.
In the weekly bar chart of PAYX, below, we continue to be encouraged by what we see. Prices could be making a two-week reversal -- a low close one week followed by a high close next week.
Trading volume was heavy but the weekly OBV line has hardly weakened. The 12-week price momentum indicator shows that the pace of the decline has begun to slow (probably because buyers have returned).
In this daily Point and Figure chart of PAYX, below, we can see that prices have made a low and the software is now projecting an upside price target in the $99 area. Let's round it up to $100.
Bottom-line strategy: Traders could go long PAYX at current levels and risk a close below $54 for now. Par or $100 sounds like a nice round number for PAYX.