Spotify Stock Could Come Dangerously Close to Record Low

SPOT has shed over 71% in the past 12 months

Fernanda Horner

Digital Content Manager

Nov 17, 2022 at 1:11 PM

spot

Spotify Technology SA (NYSE:SPOT) is down 4.5% to trade at $78.69 this afternoon, amid a broader market pullback. The security has fallen 71.1% in the past 12 months, and is just off a Nov. 4, record low of $69.49, despite the $70 level seemingly emerging as support. It looks like Spotify Technology stock could continue tumbling lower on the charts, however, after the equity came within striking distance of a historically bearish trendline.

Digging deeper, the security is running into its 40-day moving average. Per Schaeffer's Senior Quantitative Analyst Rocky White's last study, SPOT has seen five similar signals in the past three years. The stock was lower after each signal one month later in 60% of those cases, averaging a 10.7% drop. A move of similar magnitude would place SPOT just shy of a fresh all-time low.

SPOT 40 Day

A sentiment shift amongst the brokerage bunch could keep headwinds blowing for Spotify Technology stock. Of the 21 firms in coverage, 12 still say "buy" or better, while the12-month consensus target price of $115.58 is a lofty 46.8% premium to the security's current perch. This leaves ample room for downgrades and/or price-target cuts going forward.

Short-term options traders have been overwhelmingly optimistic on SPOT, too. This is per its Schaeffer's put/call open interest ratio (SOIR) 0.52, which ranks higher than just 4% of readings from the past year. An unwinding of these bullish bets could pressure shares lower still.

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