There were concerns about how DocuSign would perform even with a strong quarterly report.
Those concerns were exacerbated earlier in the week when Zoom Video (ZM) - Get Zoom Video Communications, Inc. Class A Report reported strong earnings but saw its stock price fall 15%.
It’s not perfect for DocuSign, either. Shares were up as much as 10.8% at the session high, although Thursday’s 6.1% pre-earnings rally likely made it hard for bulls to maintain full momentum.
Now the question is whether DocuSign take out key resistance.
Shares initially burst higher on the day, hitting a high of $256. However, the stock faltered near $250 resistance.
That rejection keeps $250 relevant as resistance and will now be a key focal point for the bulls.
DocuSign turned in a great quarter and the company has done very well this year. However, there are concerns on how the stock will perform when the pandemic unwinds and as a vaccine allows the economy to open up more broadly.
While it seems like DocuSign's services should prevail due to convenience and efficiency — and that may very well be true — it doesn’t mean the stock will behave the way investors want.
From here, let’s see if shares can reclaim $250. Above puts Friday’s high in play at $256. A move over the 78.6% retracement at $268.18 opens the door to the all-time highs up at $290.
Above the highs and $300-plus is in play.
On the downside, a move below $240 could trigger a gap-fill from the earnings rally. Below $230 and bulls will want to see DocuSign hold the 50-day and 100-day moving averages, currently between $215 and $220.
Below that could put $200 in play, followed by range support between $185 and $190. If range support is in play, it’s possible DocuSign tests its 200-day moving average.
From here, let’s see how $250 treats the stock.