Workday’s (WDAY) roller coaster ride: Brace yourself for the unpredictable [Video]
|Workday Inc (WDAY), a cloud-based software vendor, generates revenue by selling subscriptions to its financial management, human capital management, and student information system software. Its platform combines finance and HR in a single system, providing analytical insights and decision support for organizations of various sizes. Workday also offers additional applications, including Payroll, Time Tracking, Recruiting, Learning, Planning, Professional Services Automation, and Student. The company serves industries such as technology, finance, healthcare, education, and government. WDAY is listed on NASDAQ and is a component of NASDAQ 100.
Wyckoff sign of weakness (SOW) turned accumulation with developing back up
WDAY hit an all time high of $307.80 on 17 Nov 2021, but retraced from it. The inability to rally up in the subsequent weeks transformed the structure into a Wyckoff distribution phase. This was confirmed when a Wyckoff last point of supply (LPSY) occurred in late April and the price slid in Wyckoff sign of weakness (SOW). It took the price all the way to around $135 on 22 June.
The $135 became support and the price rallied to around $180 on 15 Aug, which helped to define the trading range. For the next few months, WDAY price tested the low of the range twice. The low of 4 Nov has characteristics of a Wyckoff spring that was followed by a Wyckoff sign of strength (SOS) rally. The price attempted to break the $180 resistance on 13 Dec but no follow through, making it a Wyckoff upthrust (UT). Nevertheless, the price did not retest the low of the range and instead launched another SOS rally at the start of 2023.
The price managed to break out from the range on 2 Feb after completion of the Wyckoff accumulation phase. It is now ranging in Wyckoff back up (BU) between $180 and $194.
Bias
Bullish. According to the Wyckoff method, WDAY is now in the BU phase. Although the price broke the $180 support, the reaction was another rally to challenge the $194. If the price is able to commit above $194, the immediate target will be $217.
If the price breaks below $180, it will likely retest the swing low of $172 followed by $158 with a prolonged consolidation in the trading range.
WDAY was discussed in detail in my weekly live group coaching on 28 Feb 2023 before the market opened. Despite the failure scenario showed up as discussed in this latest video (refer below), the characteristics of the FOMC bar was not as bearish as anticipated. This could present a trading opportunity for WDAY to ride for an up swing.
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