Adobe (ADBE) – Get report shares rose slightly on Friday, about 2% after posting better-than-expected gains.
Stocks were up around 3.5% at the session high, but stocks lack significant momentum to the upside after the event. That said, it is at all-time highs.
Additionally, stocks were up more than 13% in the 10 trading sessions leading up to earnings and also hit new highs amid that momentum. So it’s not like Adobe is depressed.
In other words, part of your earnings recovery was experienced prior to printing.
It doesn’t help that Friday’s session is quite heterogeneous in the general market, probably due to some of the talk from the Federal Reserve a few days ago and Friday’s quadruple expiration.
However, overall, the company is clearly doing well. Adobe beat earnings and revenue expectations and provided superior guidance to consensus for both metrics next quarter.
Analysts certainly liked it, with several of them raising their price targets after the quarter.
Some investors may worry that it is too late to buy stocks. But according to a real money contributor, That is not the case. Let’s look at the graph.
Amid its aforementioned rally earlier this month, Adobe broke above the $ 525 level, which had been resistance. The $ 525 mark may come into play near the high in August and September 2020, as well as the high in April.
Stocks finally erased this mark and raced right at the 161.8% extension near $ 560. From there, the stock went through an orderly retracement to the 10-day moving average.
Now, clearing out the 161.8% extension, where could the stock go from here?
If the stock can hold more than $ 550, there could be more advantages on the cards. Ideally, keeping the extension at 161.8% would be best, but over $ 550 and Adobe still looks good.
If you can clear Friday’s high and the $ 575 level, the stock could be on its way to $ 600 and potentially the $ 608 to $ 612 area. In that range, investors will find a number of key extensions of various ranges over the course of the last three quarters.
However, in the event that Adobe can’t handle more than $ 550, we could be looking at another test of the 10-day moving average. If this measure is not supported by stocks, a retest of the $ 525 breakout level may be in play.
While Adobe isn’t skyrocketing higher, keep in mind that it’s hitting new all-time highs in a tough session. Not many large-cap tech stocks can say that. Nvidia (NVDA) – Get report although I can.
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