Downgraded Yext Stock Tests Key Chart Levels

So-called digital knowledge specialist Yext Inc (NYSE:YEXT) has struggled in recent months. The shares shot higher in the summer months, thanks in part to an Amazon partnership, and went on to hit a record high of $27.19 in late August. This milestone was quickly followed by months of selling before YEXT shares bounced near the $13 level in December, and a subsequent rally attempt was blocked by double-barreled resistance from the 50- and 320-day moving averages. 

While this technical picture looks grim, you could also make the case that a bottom is in place for YEXT stock. First of all, the equity was downgraded to "underweight" from "equal-weight" at Morgan Stanley this morning, which also lowered its price target to $15 from $18. The equity fell sharply following this, but bounced neatly from the $14 level to pare much of its early losses, last seen down 1.1% at $15.13.

YEXT's recent bottoms near $13 and $14 are notable for a few reasons. First of all, the stock began trading publicly back in 2017 right at $14, and the $13-$14 range is also home to a 50% pullback from the equity's all-time high. What's more, this region also acted as a ceiling in early 2018. In all, traders monitoring Yext should be mindful of the stock moving above the aforementioned moving averages, indicating a potential breakout, or below the $13-$14 region, which could signal sharper losses ahead.

Meanwhile, options activity has been light on the security, on an absolute basis, but the action that has taken place has been call heavy. For example, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day call/put volume ratio of 3.41. In today's trading, calls are leading the way again, with new positions opening at the February 15 call.