Slack, $Work, gapped down today over 15% on earnings. Without a chart, one could easily assume that Slack is severely damaged. However, when we look at a chart, we can see that Slack consolidated nicely in April and broke out in May. After going on a strong run in late May and early June, it reacted hard once earnings were announced. However, it is now at a major support level. First, it is retesting the breakout level of around $30. In addition, the 50-day moving average is rising and just underneath it. Will Slack fall below the 50-day or will it blast higher above $40 shortly? No one really know, but the risk to reward it good here. With a stop loss at $28, you risk around $5 a share with the potential to make a large profit if Slack goes on a strong move higher.
Full Disclosure: Slack is a stock I currently own.
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