Shares of Slack (WORK) closed lower by 3.19% at $30.01 on Thursday. However, the stock put together an impressive rally off session lows.
The move comes after the company's second-quarter earnings results. Slack reported a non-GAAP loss of 14 cents per share, which was 4 cents per share better than expected. On a GAAP basis, though, the company lost 98 cents per share, notably worse than the consensus expectation for a 72 cent per share loss.
Regardless, investors are selling the name despite its 57.5% year-over-year revenue growth in the quarter.
Interestingly, Slack stock traded right down to its IPO price before bouncing and reclaiming the prior day's low. While a positive development, shares are running right into a tough line of resistance.
Let's look at the charts.
Trading Slack Stock
For those that were ready in the first 10 minutes of trading with a game-plan mapped out ahead of time, snapping up Slack stock near $26 was a solid move from a risk/reward perspective.
Catching a falling knife is hard to do, particularly at 52-week lows. But for WORK stock, the $26 IPO price was one of the few measurable points remaining on the chart. The bounce from that level was robust, sending shares higher by $5 apiece at one point.
Now trading just below $30, Slack stock is contending with a number of different levels.
First, it's got downtrend resistance (blue line) and the notable $30 mark in play near current levels. If the stock can reclaim the $30 level, it puts the 20-day moving average at $30.48 on the table, as well as Thursday's high at $31.21. Above that and the 61.8% retracement is in play just above $32.
If these levels draw in more sellers than buyers, though, WORK stock could be looking at more downside. In that case, watch Wednesday's low at $27.91. Slack stock broke this previous 52-week low before reclaiming it on Thursday. Should it come into play again, investors will need to see if holds or if Slack heads lower.
If it's the latter, the $26 level is back on the table.
The bottom line: Watch $30, it's the potential gatekeeper to higher prices. Above is good, below is not.