NOWW trade ideas
Buy opportunity: ServiceNow bounces on MA100 and trend lineHi Traders!
NYSE:NOW just bounced back from the 100 Moving Average and ascending trend line.
It is on a clear uptrend (price > 100MA > 200MA).
Stochastic RSI is in oversold area.
Entry strategy: price cross above 190.70
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ServiceNow Inc SHORTShort from $176.08
Market Cap - $31.07B
Beta - 1.64
EPS - (0.87)
P/B - 52.48
- ServiceNow reported impressive 1Q18 results - both earnings and revenues increased YoY. However, the equity remains massively overstretched trading with a forward P/E of 55.33x.
- On top of a ridiculous forward P/E, ServiceNow is also trading with a price to book ratio of 52.48.
- The IT company faces massive competition in the non-ITSM markets by companies like salesforce.com and Oracle. Though they might have a competitive edge against their competition in the security response market - their HR and customer service solutions however face stiff competition from these companies. Non-ITSM is becoming a larger part to their revenue though the increasing competition can affect their growth. On top of this continuing losses and muted free cash flow growth is a concern.
- They have had losses over the past five years and have a deficit of $1.15bn at the end of 2017.
NeroTree Capital rates ServiceNow Inc as a SELL with a price target of $140.
NOW - Negative downward momentum short from $167.23 to $134.23NOW seems forming a negative downward momentum setup along with negative Twiggs money flow divergence. It also has Plenty of selling but mostly around 5-20%. We think it will decline from here.
To Play this August $150 Puts don’t look bad.
* Trade Criteria *
Date First Found- March 23, 2018
Pattern/Why- Negative downward momentum short
Entry Criteria- $167.23 (Hit March 23, 2018)
Exit Criteria- $134.23 or 200 day moving average.
Stop Loss Criteria- $178.23
Indicator Notes- Strong Twiggs money flow divergence
Special Note- Plenty of selling but mostly around 5-20%. August $150 Puts don’t look bad here.
Please check back for Trade updates. (Note: Trade update is little delayed here.)
