Shares of ChargePoint (CHPT) stock are down 6% on Friday and clinging to a vital support level after the provider of electric-vehicle-charging systems reported disappointing earnings on Thursday after the close.
Revenue almost doubled to $125.3 million, but the company missed analysts’ earnings and revenue expectations. And full-year revenue guidance fell short of expectations.
Of course, it doesn’t help that there was a lot of selling pressure in the overall market at today’s open following a stronger-than-expected jobs report for November.
As for ChargePoint itself, the business continues to operate at a loss, while the chart is displaying quite a bit of weakness.
Contrast that with Ulta Beauty (ULTA), which is hitting all-time highs on the day following strong earnings.
Trading ChargePoint Stock on Earnings
Chart courtesy of TrendSpider.com
One level on the chart jumps out very clearly to me: $11.
That’s for a multitude of reasons, but mostly because the stock has been bouncing from this area for more than a month. The 78.6% retracement also comes into play near $11, as does the third-quarter low.
With those levels syncing up, it makes this area even more vital. That works in the bulls’ favor — provided support holds.
The problem? Since topping out near $20 resistance in September, ChargePoint stock has been making a series of lower highs, which is bearish price action.
When that's combined with a static level of support — in this case, between $11 and $11.50 — we get a descending triangle, which is a bearish technical pattern.
If $11 holds as support, that’s great. But the bulls will need to see further proof to justify holding a long position.
That starts with the stock getting back above and staying above the 10-day and 21-day moving averages, as well as clearing this week’s high at $12.59, negating the series of lower highs.
If support doesn’t hold, that opens the door back down to $10, then potentially down to the 2022 lows at $8.50.
The bottom line: Keep a very close eye on the $11 area. It will dictate the next development for ChargePoint stock.
Cyber Week Deal
Get Action Alerts PLUS for our lowest price of the year! The markets are tough right now, but this is the best time to have professional guidance to help navigate the volatility. Unlock portfolio guidance, stock ratings, access to portfolio managers, and market analysis every trading day. Claim this deal now!
