ChargePoint stock is teetering on key support after the company reported disappointing earnings. Here’s the level it must hold now.
Shares of ChargePoint (CHPT) – Get Free Report stock are down 6% on Friday and clinging to a vital support level after the provider of electric-vehicle-charging systems reported disappointing earnings on Thursday after the close.
Revenue almost doubled to $125.3 million, but the company missed analysts’ earnings and revenue expectations. And full-year revenue guidance fell short of expectations.
Of course, it doesn’t help that there was a lot of selling pressure in the overall market at today’s open following a stronger-than-expected jobs report for November.
As for ChargePoint itself, the business continues to operate at a loss, while the chart is displaying quite a bit of weakness.
Contrast that with Ulta Beauty (ULTA) – Get Free Report, which is hitting all-time highs on the day following strong earnings.
Trading ChargePoint Stock on Earnings
Daily chart of ChargePoint stock.
Chart courtesy of TrendSpider.com
One level on the chart jumps out very clearly to me: $11.
That’s for a multitude of reasons, but mostly because the stock has been bouncing from this area for more than a month. The 78.6% retracement also comes into play near $11, as does the third-quarter low.
With those levels syncing up, it makes this area even more vital. That works in the bulls’ favor — provided support holds.
The problem? Since topping out near $20 resistance in September, ChargePoint stock has been making a series of lower highs, which is bearish price action.
When that’s combined with a static level of support — in this case, between $11 and $11.50 — we get a descending triangle, which is a bearish technical pattern.
If $11 holds as support, that’s great. But the bulls will need to see further proof to justify holding a long position.
That starts with the stock getting back above and staying above the 10-day and 21-day moving averages, as well as clearing this week’s high at $12.59, negating the series of lower highs.
If support doesn’t hold, that opens the door back down to $10, then potentially down to the 2022 lows at $8.50.
The bottom line: Keep a very close eye on the $11 area. It will dictate the next development for ChargePoint stock.
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