Software stocks got hit yesterday, with the group down over 3% and many individual stocks seeing losses as high as 10% for the day. While the decline was due to lowered guidance from one of the faster movers in the group, realistically, many of these stocks were due a pullback given their recent run-ups in price.
One such stock is Anaplan, Inc. (PLAN), which provides a cloud-based connected-planning platform. This company provides their subscription-based software applications globally and, while the company is not yet posting earnings, they've reported year-over-year revenue increases north of 45% for the past four quarters.
DAILY CHART OF ANAPLAN INC. (PLAN)
The stock broke out of a 6-month base on volume earlier this week before pulling back with other Software stocks. As you can see, yesterday's pullback carried into the open today, and the stock dropped below its 10-day simple moving average. Since then, buyers have snapped up shares of PLAN so that the stock is now bullishly finding support above its 10-day mav.
A quick look at the Software ETF IGV will show you that this group was not touched by the recent coronavirus selloff, as demand for Cloud Based Software remains strong. In addition, this pullback of a leadership stock in the strong Software group is playing out with other top stocks as well.
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Mary Ellen McGonagle