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- DOCU stock price breaks the parallel channel and falls.
- Software industry is expected to attract investors, Docusign Inc. can benefit.
Docusign Inc. marks a fall from the parallel channel being formed after a downside gap which occurred after the company released its earnings. The fall in DOCU stock price was observed after it breached the parallel channel which marked a sideways movement of the company. The gap down occurred despite a positive revenue report rolled out by the company, where the earnings revealed a surprise of 24.06% from the estimates.
Software Stocks to Surge Ahead
The software industry is projected to attract increasing investments in software-driven technologies. Technologies that incline the businesses towards Artificial Intelligence (AI), Robotic Process Automation (RPA) and Intelligent Document Processing (IDP) could benefit the companies in the long run. The initiation for growth was visible in Docusign Inc. ‘s financial reports that were recently released.
Docusign Inc. recorded a gross-profit margin of 78.82%, which was 56% higher than that of the industry’s average of 50.54%. Company’s revenue came in at $659.58 million for the fourth quarter that ended on January 31, 2023. The reported revenue was up 13.6% year-over-year. Furthermore, the company places its estimates for the fiscal year 2023, at $2.70 billion for total revenue with its non-GAAP gross margin to range between 81% and 82%.
DOCU Stock Price Analysis
Source: DOCU stock by TradingView
DOCU stock price breaks down of the parallel channel after facing resistance at $58.48. The trading volume suggests a deserted market engagement from the investors. The falling price can find support near $51.50 and reverse the movement. The EMA ribbon forms a possibility of a bullish crossover, which can help DOCU stock price form an uptrend. The Bollinger Bands diverge reflecting the present volatility in the market.
The volatile movements in Docusign Inc. has casted an effect on the indicators turning them bearish. The MACD forms a negative cross and records ascending seller bars in regions below the zero-histogram mark. The RSI drops closer to the floor ranges indicating increasing seller participation in the market for DOCU stock price.
Conclusion
Docusign Inc. marked a downside gap, followed by a parallel channel resulting in a breakdown. The bearish trend is observed even after a release of a positive earnings report. The reported figures show growth and future estimates display expansionary plans for the software company. The falling price can look for support near $51.50 and plan for a reversal. The prevailing volatility can be ended once the uptrend is established.
Technical levels
Support levels: $51.50 and $49.00
Resistance levels: $58.48 and $61.35
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
