Shares of MongoDB (MDB) experienced a significant surge in extended trading on Thursday following the company’s impressive earnings report and increased full-year guidance. The demand for generative artificial intelligence (AI) software played a crucial role in driving this positive outcome.
MongoDB has faced challenges this year due to an uncertain macro environment and slower adoption of its flagship Atlas multi-cloud database-as-a-service offering. As a result, the company had to revise its outlook in May, leading to a decline of more than 33% in its stock since the beginning of the year.
However, the recent earnings report has sparked renewed investor interest in MongoDB. The stock jumped 13.5% to $279.00 in after-hours trading on Thursday, indicating a potential turnaround for the company.
Analyzing the MongoDB chart, it is evident that the stock is on the verge of confirming a double bottom pattern. This pattern typically occurs after a steep decline in prices and suggests a potential market bottom. The second swing low made a slightly lower low, but the relative strength index (RSI) indicator showed a higher low, indicating a bullish divergence.
With the better-than-expected results, MongoDB is poised to open above the neckline of the double bottom pattern on Friday morning, confirming the pattern and signaling a potential upward trend.
Investors should pay attention to several key price levels on the MongoDB chart. The $294 level is significant as it represents a location where market participants who bought the stock near recent lows may consider locking in profits. Additionally, a move above this level could lead to a climb towards $323, where the stock may encounter resistance near a horizontal line connecting three prominent troughs.
If the bullish momentum continues, MongoDB shares could rally to the $370 region. This area on the chart is marked by a multi-month trendline that connects multiple peaks and troughs in the stock. Investors may choose to place sell orders near this level.
During pullbacks, it is crucial to monitor the $265 level. This area is likely to attract buying interest as it aligns with the neckline of the double bottom pattern and serves as a breakout point.
In conclusion, MongoDB’s strong earnings report and increased full-year guidance have sparked a significant surge in its stock. The company’s generative AI software has played a crucial role in driving this positive outcome. The MongoDB chart indicates the potential confirmation of a double bottom pattern, suggesting a potential market bottom and an upward trend. Investors should monitor key price levels, including $294, $323, and $370, while also keeping an eye on the $265 level during pullbacks.
