Lightspeed Commerce (LSPD) is an all-in-one payment system that caters to both online and bricks-and-mortar stores. The stock has declined quickly in recent days so let's check out the charts.
The charts looked promising back on July 12 and traders could have made a profitable trade. Now what?
In the daily bar chart of LSPD, below, we can see that the shares have tumbled about $40 in just a few short (and painful) days. Prices have closed below the rising 50-day moving average line and are not far from a possible test of the rising 200-day moving average line.
Trading volume spiked sharply higher as traders voted quickly with their feet. The On-Balance-Volume (OBV) line quickly plunged. The 12-day price momentum study did not reveal a bearish divergence to give chart watchers a "heads up" on a downside reversal.
In the weekly Japanese candlestick chart of LSPD, below, we can see a doji pattern and some upper shadows in early September to mark a top reversal. Candle patterns do not give us price targets.
Trading volume was very heavy on the decline into October. The weekly OBV line made a 180-degree turn to the downside. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profits sell signal.
In this daily Point and Figure chart of LSPD, below, we can see that the software is projecting the $57 area as a potential downside price target. The chart also shows a fair amount of potential support below current levels (left scale). Sometimes "support" is an overrated technical tool.
Bottom-line strategy: Rapid selloffs on heavy volume are not a good sign and should not be ignored no matter what your cost basis.
