Many software stocks peaked in price late July as reduced corporate spending worries, coupled with high valuations, pushed these stocks down. The good news is, these formerly leading stocks are coming back into favor as growth prospects are high and the economic outlook has brightened.
Today, we're going to review Software stock Bandwidth Inc. (BAND) following today's announcement that they're among the first providers partnering with Google for Verified SMS. Businesses are now sending trillions of messages each year; Verified SMS aims to reduce fraud risk while improving response rates.
As you can see in the chart below, the positive news helped push this stock up above its 50-day moving average, which can often act as upside resistance. In addition, the RSI and MACD are both in positive territory while today's action bullishly occurred on volume.
While the stock is poised for further near-term upside, the next area of possible upside resistance is BAND's 200-day moving average, which is currently at $69.5. A break above that level would point to even further upside possibilities.
As you can see, I've highlighted the stock's prior downtrend reversal, which took place 12 months ago. Continued support at an upward trending 10-day moving average is one of the keys to the stock's continued uptrend, as is a positive RSI and MACD.
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Mary Ellen McGonagle,
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