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.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.