Beyond Meat Stock Looks Healthy Despite Earnings Tumble
Beyond Meat
It's hard to look at a stock that was down more than 20% from its highs on Tuesday morning and say it still looks healthy. But that's the case with Beyond Meat (BYND) - Get Report .
The stock fell more than 5% in Monday's trading session in anticipation of its second earnings report as a public company. Currently down less than 5% in midday trading at $210, shares are still up more than 700% from their $25 IPO price in May.
Shares fell more than 12% after Beyond Meat released its results and announced a secondary offering. Investors can debate the merit of this offering, given that a majority of it is coming from insiders on an early lockup expiration.
But that doesn't change the fact of just how well this stock is responding in the market. Second-quarter revenue surged almost 290% to $67.25 million, easily beating estimates by more than $14 million. The company lost 24 cents per share, which missed estimates by 15 cents per share, but it's clear that management is after market share and new customers.
While Beyond Meat stock was flirting with bear market territory, as defined by a 20% drawdown, the stock is no longer in that area. With the sharp rally from Tuesday's low, Beyond Meat is now down "just" 12.5% from its highs.
Let's look at the chart to get a better idea of where Beyond Meat may go.
Trading Beyond Meat Stock
Tuesday's bounce comes as little surprise to active traders. Beyond Meat stock opened near its 20-day moving average at $187, held this mark as support and ripped back over $200 per share.
In doing so, the stock also reclaimed its 8-day moving average at $207.41. The key will now be to see whether Beyond Meat stock can sustain this bounce for more than a few hours. If it can't, seeing what levels come in as support will be key.
It will be hard to maintain a $12+ billion market cap on its fundamentals alone, so bulls will need the technicals to cooperate if they want more gains. If BYND stock can take out its pre-earnings close near $221, it puts two upside levels on the table. The first is its all-time high near $240. The second is channel resistance (blue line).
On the downside, I want to see how Beyond Meat stock handles $200. This mark has been significant amid its short public life, and comes in near Monday's low at ~$201.
If the 8-day and $200 level can't support Beyond Meat stock, uptrend support and the 20-day will be key. It's what saved the stock on its post-earnings open, and should it give way, momentum may drain quickly.
The 50-day moving average is rising quickly, but is all the way down at $148.50 and may be the next line of defense should the selling accelerate in Beyond Meat. Also worth mentioning is the post-IPO 50% retracement at $142.12 and the 38.2% retracement at $165.15.
Look for these lower downside levels to potentially support Beyond Meat should momentum begin to fade.
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This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.