Software company Monday.com has sported some nice action over the last few weeks after finding support off the 50-day moving average. There are a few things I really like about this stock. First, it has delivered strong sales growth over the past year. While the earnings are not there yet, it is important to note that for recent IPOs like MNDY it often takes time for EPS growth to show up. However, strong revenue growth is often a sign of positive things to come. In addition, MNDY has become a favorite of more and more mutual funds over the last two quarters which is an excellent sign of institutional support. Most importantly, we have seen some strong action in software stocks this year, especially Asana and Cloudflare. While I unfortunately missed buy points in these stocks, their action is a clue that the industry on the whole is heating up.
From a mathematical perspective, MNDY appears to offer a justifiable risk to reward here with its' first bounce off the 50-day line. I currently own Monday.com with a stop loss below this key support level.
Risk right. Sit tight.
-Tom
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Full Disclosure: I currently own MNDY.
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