The 500-day moving average is weighing heavy on GDDY
Last month was a doozy for investors. We've discussed how investors can manage September seasonality ad nauseam, but what about the other side of the coin? What stocks out there could fall victim to the seasonal doldrums, or are staring up at daunting technical ceilings? The trading experts at Schaeffer's Investment Research compiled an "8 Stocks to Sell Now" report to highlight eight such stocks, including two from the tech sector. Click here to view the entirety of the special report.
GoDaddy Inc (NYSE:GDDY)
Despite optimistic expectations, online domain name GoDaddy's (GDDY) expenses are rising faster than its revenue and the company is dependent on international growth that has been slowing in recent quarters.
GDDY's 500-day simple moving average has been supportive in the past, but has now turned into resistance, per the red line in the chart above. Meanwhile, GoDaddy's price/earnings ratio of 63 highlights how expensive the company is based off of earnings.
There's a severe call bias among options traders, per the equity's 50-day call/put volume ratio at the ISE, CBOE, and PHLX of 14.41 and the 10-day call/put volume ratio of 201.50, the latter of which ranks at an annual high. In the brokerage community, 7 of the 12 in coverage maintain a “strong buy” rating, which makes the struggling stock at risk for downgrades that could weigh GDDY down even more.
RingCentral Inc (NYSE:RNG)
Cloud communication concern RingCentral (RNG) is beginning to ebb from its hyper-growth, formerly led by the Covid-19 pandemic. Since it remains unclear how school and work will return in the long-term, it makes choosing RNG as an investment, risky.
While the equity broke down through its long-term, 500-day moving average, it has made little attempt to rally post-earnings. But despite sporting a year-to-date reading of negative 44%, analysts remain optimistic. In fact, a hefty 18 of 20 covering brokerages boast a "buy" or better, suggesting RNG is ripe for bear notes.