We had a look at a short setup in an overvalued darling yesterday in this NFTRH+ update. Today we have an update on a buy setup for a not nearly so overvalued software stock. Recall here that I have been trying to discern who has deserved the AI-driven beating in software and who did not.
Well, one look at the weekly chart below and you know that NOW has been driven down hard. Fundamentally, as I’ve mentioned in the past, as a SeekingAlpha contributor I have free access to premium fundamental analysts at SA. Of course, I don’t implicitly trust people who claim to be stock analysts. But they are of value when I am chasing certain themes, like who has been beaten unfairly by the AI hysteria.
We want companies that can benefit, not be impaired by the adoption of AI Agents. ServiceNow appears to be one of those. Understand, that is not my work. It is the work of multiple others who dig into individual companies. What I do know is that NOW’s valuation has been hammered down to something reasonable per its growth rate.
What I mainly know, however, is that the stock was hammered to the support area defined by the 2022-2023 highs. I also know that is a handy place for a stop loss if the plan fails.
Disclaimer: I bought the stock today.
It has bounced a bit from the low. But if interested and if you want to get miserly with it you might watch to see if it retests at the 95-100 area. Below 95 I’d start to get a little hot under the collar (i.e. impatient, i.e. tempted to limit the loss). The chart would only be completely broken as a potential bottom feed with a loss of the 2022 low at 67.40.
As with the PLTR short setup (I have not shorted, and prefer the upside bounce setup to play before deciding), much will depend on the broad market, obviously. I do like the idea of trying to find software babies that got thrown out with the software apocalypse bathwater.
NFTRH+ trade setup ideas are presented for consideration and further research only, not as recommendations. I may or may not personally take positions in all or even most NFTRH+ ideas, as it would depend on my portfolio composition at any given time. “Stop loss” and target levels are usually noted and should be respected.
