Anaplan Stock Now Verges on Oversold

Several significant price points are in play as PLAN pulls back sharply

Managing Editor
Sep 9, 2019 at 1:41 PM
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Software specialist Anaplan Inc (NYSE:PLAN) is suffering a notable pullback this afternoon, down 4.7% at $49.45, at last check. As a result of today's dip, the stock is on pace to close beneath an off-the-radar moving average that's had big bullish implications for the stock in the past.

The equity has been trading publicly since just mid-October, but has already made a positive impression on the charts with its 86% year-to-date gain. However, what had so far been a gradual pullback from its July 26 closing high of $60.35 has accelerated significantly today, with PLAN's lows checking in around the $48 level -- below late-June support at $49. 

At risk now is key technical support from the 80-day moving average. Per data from Schaeffer's Senior Quantitative Analyst Rocky White, ahead of today's dip, Anaplan stock had spent the past few sessions hovering within one standard deviation of its supportive 80-day trendline, which previously cushioned lows in April and May. The last (and only other) time PLAN pulled back to test its 80-day moving average after a long stretch above it, the stock was up 27.4% one month later.

Daily PLAN with 80MA

Anaplan stock has recovered from its intraday low of $47.88 to trade back above the $48 level -- which marks double the Jan. 3 year-to-date closing low -- as well as the 20% correction from the aforementioned July closing high, located at $47.92. For now, these two psychologically significant price points appear to be holding up as a makeshift floor for PLAN, even as the stock remains well on pace for a daily breach of its previously supportive 80-day moving average. And significantly, the 80-day for PLAN now rests at $51.78, just above the $51-per-share level that marks a triple from the equity's initial public offering price (IPO) of $17.

As a result of today's slide, PLAN is fast approaching oversold territory for the first time ever. The equity's 14-day Relative Strength Index (RSI) is hovering around 32 this afternoon, in all-time low territory.

Meanwhile, our Schaeffer's Volatility Index (SVI) shows a reading of 46% for Anaplan, which ranks in the 17th annual percentile. In simpler terms, volatility premiums are quite low for short-term option contracts -- making now an ideal time for opportunistic traders to bet on PLAN's next directional move.

 

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