Shares of ServiceNow (NOW) are slumping lower on the company's dismal guidance, according to reports Thursday. Let's look closer at the charts and indicators to see if the risk is to the downside or whether there is opportunity on the upside.
In the daily bar chart of NOW, below, we can see that the shares have been finding buying interest (support) in the $420-$400 area the past three months. Prices managed two rallies above the 50-day moving average line in June and early July but recently a bounce stopped at the underside of the 50-day line.
The On-Balance-Volume (OBV) line made a new low in July to continue the lengthy downward trend and tell us that sellers of NOW have been more aggressive than buyers for months now. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line and pointed lower - not a good recipe for a rally.