Spotify stock falls more than 11% after earnings releaseSpotify's stock has shown significant price weakness and is now trading below $600 per share, shortly after a large bearish gap formed following the release of its quarterly results. The company reported earnings per share of €1.07, below expectations of €2.13 per share. Additionally, Spotify projected operating profit for Q2 at €539 million, under the market estimate of €557 million. The earnings miss and weak forward guidance have led to persistent bearish pressure, triggering strong selling momentum in the short term.
Uptrend Weakens:
Spotify has been in a consistent uptrend since around November 2022. However, in recent months, buying pressure has failed to push the price to new highs, with the stock now trading in a lateral range that signals a period of price consolidation. If the uptrend continues to stall, this neutral phase may extend in the short term.
ADX:
The ADX line has started to show early signs of neutrality, hovering around the 20 level. This indicates reduced volatility over the past 14 trading sessions. If ADX remains in this range, it suggests that price neutrality could persist.
RSI:
A similar condition is seen in the RSI, which has reached the neutral 50 zone—where bullish and bearish momentum are in balance. This reinforces the neutral sentiment and may support continued sideways movement in upcoming sessions.
Key Levels:
$640: The most recent high. A breakout above this level could signal a continuation of the long-term uptrend.
$540: Current support level, aligned with the 100-period simple moving average. Stability here may support ongoing consolidation.
$480: Major support at recent lows. A bearish move back to this level could trigger a fresh selling trend in the short term.
Written by Julian Pineda, CFA – Market Analyst
