Don't Ignore This Chart!

When a Strong Stock in a Leadership Group Pulls Back

 | 

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.

If you'd like to review select stocks that are currently in similar attractive buy zones, I urge you to trial my bi-weekly MEM Edge Report for a nominal fee by using this link here. In addition to a 4-week trial, if you act now, you'll receive last Sunday's main report as well as two Alert Reports and Wednesday's Midweek Report, complete with precise buy points!


Warmly,

Mary Ellen McGonagle

MEM Investment Research

Mary Ellen McGonagle
About the author: is a professional investing consultant and the president of MEM Investment Research. After eight years of working on Wall Street, Ms. McGonagle left to become a skilled stock analyst, working with William O’Neill in identifying healthy stocks with potential to take off. She has worked with clients that span the globe, including big names like Fidelity Asset Management, Morgan Stanley, Merrill Lynch and Oppenheimer. Learn More
Subscribe to Don't Ignore This Chart! to be notified whenever a new post is added to this blog!
comments powered by Disqus