Beyond Meat's Must-Hold Support Level on Earnings Selloff

Beyond Meat is getting clocked on Tuesday after disappointing earnings. Here's the stock's must-hold support level.
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Beyond Meat  (BYND) - Get Report has been volatile over the past few days, emphasized by Tuesday’s 20% decline.

The move came after the company reported a loss for the most recent quarter, surprisingly analysts that were looking for a profit.

At Tuesday’s low, Beyond Meat stock was down almost 25%. However, the volatility started before Tuesday's session. 

On Monday, shares were all over the place. McDonald’s  (MCD) - Get Report had reported earnings before the open, while also announcing its new McPlant meatless offering.

Beyond Meat swung violently, as investors tried to figure out if the company was involved in the project. It appeared as though Beyond Meat did not have anything to do with it, thus shares fell more than 14% from Monday’s high to the session lows. 

Once Beyond Meat said it was involved in the process, shares spiked, climbing almost 21% from the day’s low to its high.

Trading Beyond Meat

Daily chart of Beyond Meat stock.

Daily chart of Beyond Meat stock.

Despite Monday’s clarity initially triggering a large rally, Beyond Meat still closed lower by 4% on the day.

The action was very mixed on Monday and actually tilted in favor of the bears. However, earnings after the close made it an almost impossible task to pick a directional bias and stick with it.

As we know, anything can happen on earnings - good or bad.

Right now, Beyond Meat is clinging to a critical support area. In May, shares made a powerful move up through $120 on earnings. This level became a critical mark of support in the ensuing months.

If Beyond Meat can hold this level as support, bulls may be able to retain control. If that is the case, then the stock needs to reclaim the 200-day moving average as well.

If the 200-day moving average acts as resistance or is unable to be reclaimed, the $120 level remains suspect.

Should Beyond Meat close below Monday’s low at $113.26, a gap fill down toward $100 is on the table.

Should shares reclaim the 200-day moving average, look for a post-earnings gap-fill up toward the $140 to $150 area. There it will also run into the 100-day moving average.

Above that and Beyond Meat will have to contend with the 50-day moving average and the $160 breakout area from September.