Spotify Technology (SPOT) gapped higher Wednesday as the company reported that user growth sped up and ad revenues rose in the second quarter. Let's look closer at the charts and indicators to see if the price gap is the start of a move higher or a one-day wonder.
In our July 6 review of SPOT we were positive and recommended "Traders who are not discouraged by our last buy recommendation could go long SPOT at current levels risking to $89."
In this daily bar chart of SPOT, below, we can see that the shares have rallied from our early July buy recommendation. Prices are now above the rising 50-day moving average line. The slope of the 200-day moving average line remains negative.
The On-Balance-Volume (OBV) line shows a slight improvement in July. The Moving Average Convergence Divergence (MACD) oscillator is crossing the zero line for an outright buy signal.