Will ServiceNow Stock Initiate Uptrend After This Consolidation?

• The ServiceNow stock price has been consolidating between the range of $614 and $527 for the last three months.
• The ServiceNow stock price has surged by over 45% in a year.
• This company has reported a 41.30% increase in the net profit in the previous financial Report.

The Market capital of the ServiceNow stock –  $114.196 Billion

The Current Market Price of ServiceNow Stock –  $558.96

ServiceNow Stock Synopsis

The NOW stock has closed its previous trading session at + $5.44 with a rise of 0.98%. It has opened a gap-up but declined as the day progressed. The price has faced rejection from the 50-day Exponential Moving Averages and closed the day near the day-low value of the stock. The price has surged just 1.30% in a week and declined 3.36% in a month. It signifies that the price is trading in the same range and consolidating.

Now company is in a huge cash surplus of $2.05 Billion and the company is in a comfortable position to repay its financial obligation. The ServiceNow company has never paid any dividend to its shareholders, which is a big NO-NO for dividend-seeking investors. The EPS of the company has surged significantly by over 5000% in the previous financial years.

The total revenue of the company has seen a strong jump in the past few years. In 2016 the revenue of the company was just $1.39 Billion, which has marginally increased to $7.25 Billion in 2022. The company’s net income has followed the same path as the company turned profitable in 2019. The company’s net income has surged over 94% and 41% in the previous two financial years. 

Technical Analysis of the ServiceNow Stock

The Now’s stock price is currently struggling between the 50-day and 100-day Exponential Moving Averages. It is currently trading below the 50-day EMA but above the 100-day EMA. If we observe the slope of the EMA, it is now flat which supports the above statement that the price is in a consolidation phase. The Relative Strength Index (RSI) is currently below 50 but it is rising sharply. That indicates the bulls are gaining momentum. 

ServiceNow stock has given a breakout from the major resistance level of $520 and is now trading above that. The price is taking support from this level and is looking strong for another rally. NOW stock’s resistance is present near the level of $601 and $696. Those levels are drawn as Resistance 1 and Resistance 2 on the chart. If we consider the support level, it is present at the $515, $426, and $350 levels.

Conclusion 

As we have discussed above, the price is consolidating after giving a breakout. The financial performance of the company is improving. That can further boost the trading price of the stock. If the price breaks the support level, it can further fall to $492 and $426 levels. Suppose the price rises from this level, it can face resistance near the $600 level.

Technical level

Resistance – $601 and $696

Support –  $515 and $426

Disclaimer

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