Workday ($WDAY) put in some good work today. Here is the lead up to the current price action. – August 25, 2023
This is Dan Fitzpatrick with Fitz in Five. I want to look at Workday ( NASDAQ: WDAY ) because it has been putting in a lot of work today.
This is a stock that first kind of blew out of this resistance level here, it’s a little of what I call a “pinch and pop”, back here, on heavier than average volume after first moving here. So we get a selloff and then a recoil right off the 20, on twice average volume. That’s institutional buying there.
Then the stock stabilizes and then it starts marching higher. So institutions are buying this stock. Again, it’s got pretty good volume here, this isn’t retail trading taking a position in some goofy stock. You can see, it’s been holding above the 50 all the while.
Then it runs up here, finally at $240.00 institutional desks back off and say, Do you know what? We might be bidding against ourselves, so maybe we better just let the stock come down a bit before we start buying more of it.
And then, sure enough, the stock does come down and well, what do you see? It is holding right at the 50-day moving average, then a gap down, Wow, we’ve got to get this stock now. The stock gaps down on a break of the 50-day moving average and immediately corrects itself.
This is a bullish indication if you ask me. You didn’t ask but if you did, that is what I will tell you. So we get this big correction, this correction here, and then a correction of the correction. Now we are wiggling and jiggling around here and then today, bam, off to the races.
I took a position in this stock today, I actually took a call position too, a hedged bull call, actually a diagonal spread. How’s that? The thing is, with volume as heavy as it is, I think it is just a matter of time, a short matter of time before Workday ( NASDAQ: WDAY ) continues its move higher.
So if you are taking this kind of trade, just know that the best way to buy this is on pullbacks to, in this case, the 50-day moving average. And they happen, so don’t say I can’t afford to wait. Yes, you can. I think you will get another pullback here, a little bit of a “drifty” maybe.
But ultimately, once the stock runs above 240.00 I really think that this stock has a lot more upside potential. I’m setting an alert for me so I get it
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