Workday Shares Soar 11% After Strong Quarterly Results

Shares of Workday (WDAY) surged 11% in extended trading on Thursday following the release of the company’s quarterly results. The human resources and capital management software provider reported earnings that exceeded expectations and highlighted growth opportunities in international markets.

Investor Scrutiny and Concerns

Workday’s stock has faced scrutiny from investors this year due to concerns that enterprise customers have reduced spending on premium software subscription services amid macroeconomic uncertainty. As a result, the stock has declined approximately 25% from its record close.

Double Bottom Breakout

Workday shares have formed a double bottom pattern between June and August, indicating a potential reversal of the previous downtrend. Additionally, the relative strength index (RSI) indicator has shown a bullish divergence, suggesting a decrease in selling momentum.

The stock has recently reclaimed the 50-day moving average and is poised to break out above the neckline of the double bottom pattern.

Key Price Levels to Monitor

Following the positive earnings report, investors should pay attention to three important price levels in Workday shares.

The first level is around $264, where the stock may encounter resistance from a trendline connecting three troughs that formed between December and March, along with a late May countertrend peak.

If the stock continues to rise, it could reach the $279 region, where selling pressure may arise near a horizontal line that connects trading levels from December to March, including the opening price of a significant stock gap in early March.

A more significant move higher could drive the stock to $306, a level that aligns with the stock’s late February record close. This area also corresponds to a price target derived from a bars pattern, which takes into account the up-trending move from September to February and positions it from the double bottom’s low.

It is worth noting that the stock’s recent advance started after a gap lower, similar to the stock’s previous up-trending move that followed the broad market sell-off on August 5.

Investors should keep a close eye on these price levels as they could indicate potential resistance or support for Workday shares.

Conclusion

Workday shares experienced a significant boost in after-hours trading following the release of the company’s strong quarterly results. The stock has formed a double bottom pattern, indicating a potential reversal of the previous downtrend. Investors should monitor key price levels at $264, $279, and $306 to gauge the stock’s future performance.

Please note that the information provided in this article is for informational purposes only and should not be considered as financial advice. The author does not own any of the mentioned securities.

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