DocuSign Inc. (DOCU) released its latest earnings figures Thursday night. The stock is down sharply in recent days. Is it time to book profits?
We looked at the charts of DOCU on Tuesday before earnings, writing, "The at-home economy seems to be booming and the price of DOCU has been soaring. Prices need to 'catch their breath' and consolidate some of the recent price gains. I would look for some sideways price action and keep in mind that the upcoming earnings report needs to deliver. Longs should risk a close below $225 now." (bolding added)
Let's check out the charts and indicators again Friday to see if a new strategy is warranted.
In the daily bar chart of DOCU, below, we can see that prices have retreated to test the rising 50-day moving average line. The On-Balance-Volume (OBV) line shows a rise until just recently. The sharp move down in the OBV line tells me that traders have become aggressive sellers of DOCU.
The Moving Average Convergence Divergence (MACD) oscillator has been weakening since early July.