VMware stock price has been in a strong bullish rally since the start of March 2023, rising from the low of $109 and forming a high of $170. The stock price surged approximately 55.30% from the low.
Recently, VMW faced strong rejection near the $170 level, and the bullish move was halted. The stock price retraced and formed a support at $154.50. It re-gained bullish momentum in hopes of retesting the annual high.
The 24th August candle closed as a strong bearish candle and the last candle closed as a bullish candle with a slightly longer lower wick to the downside. It indicates that bulls are trying to protect the price from falling below $160.50.
If bears can push the price below the support level of $160.50, it might head down toward $154.50. On the other hand, if the price can rise above $170, it might rise toward the next resistance level of $172.
Developments In VMware
VMware will report its second-quarter financial results on 31 August, 2023. The consensus has estimated the revenue to be $3.452 Billion and the earnings per share to be $1.719. Out of the last four quarters, alternate two results have been positive.
Broadcom’s 50% cash and 50% stock proposal to buy VMware is expected to get regulatory approval. The planned takeover of VMware has been cleared by British regulators, leaving the approval of China as the last major obstacle to the deal.
The Chinese regulators have already failed to approve Intel’s (INTC) planned acquisition of Tower Semiconductor (TSEM) for $5.4 Billion.
The partnership between Nvidia and VMware has expanded in order to bring data-secure generative Artificial Intelligence to more businesses. The goal is to offer business customers the ability to customize large language models that use customer internal data to create private models for internal usage.
Will VMW Stock Bullish Rally Continue?
The stock price trades above 20,50,100 and 200-day exponential moving averages, implying bullish momentum. Chaikin money flow score has dropped below the 0 mark and stands at -0.07 suggesting a weakness in the market. CMF has been trading below the 0 mark since 26th July indicating a confluence of bears.
The relative strength index has been hovering near the overbought zone and currently stands at 63.08 suggesting bullish momentum.
VMW stock price has crossed above the upper band of Bollinger which indicates the possibility of a short-term pullback toward the 20-day simple moving average. The Bollinger bands have contracted indicating a decrease in volatility.
Conclusion
The market structure and price action of VMware stock are overall bullish. However, the direction can be shifted after the release of second-quarter earnings results.
Technical levels
- Major support: $160.50 and $154.50
- Major resistance: $169 and $172
