Shares Jumped More Than 13% in Extended Trading Thursday

Source: TradingView.com
Source: TradingView.com

Key Takeaways

  • Shares in MongoDB soared more than 13% in extended trading Thursday after the company reported better-than-expected earnings and boosted its full-year outlook amid robust demand for generative AI software.
  • The stock sits positioned to confirm a double bottom, with the shares projected to open above the pattern’s neckline on Friday morning.
  • Amid post-earnings upside in MongoDB shares, investors should watch key chart levels at $294, $323, and $370.
  • During pullbacks, investors should monitor the $265 area, which will likely attract buying interest near the double bottom’s neckline.

Shares in MongoDB (MDB) soared in extended trading Thursday after the company reported better-than-expected earnings and boosted its full-year guidance amid robust demand for generative artificial intelligence (AI) software.

The company’s shares have slumped more than 33% since the start of the year through Thursday’s close after an uncertain macro environment and slower uptake of its flagship Atlas multi-cloud database-as-a-service offering prompted it to cut its outlook in May.

MondoDB shares gained 13.5% to $279.00 in after-hours trading Thursday.

Below, we’ll take a closer look at the MongoDB chart and use technical analysis to locate important price levels worth watching out for.

Double Bottom Confirmation

Since gapping sharply lower in late May, MongoDB shares have carved out two distinct swing lows at around the same level, setting the groundwork for a double bottom, a classic chart pattern that typically forms following a steep decline in prices and indicates a potential market bottom. Moreover, while the second swing low made a slightly lower low, the relative strength index (RSI) indicator made a comparatively higher low to create a bullish divergence, a chart signal pointing to waning selling momentum. 

Indeed, the stock sits positioned to confirm the patten, with the shares projected to open above the formation’s neckline on Friday morning after the company’s better-than-expected results.

Monitor These Key MongoDB Chart Levels

Amid further post-earnings momentum, investors should monitor three key overhead price levels of interest.

Firstly, it’s worth keeping an eye on the $294 area, a location on the chart where market participants who purchased the stock near recent lows may look to lock in profits near the June 1, 2023 close, the day before an earnings-driven breakaway gap.

A move above this level could see the shares climb to around $323. Where they would likely run into overhead resistance near a horizontal line joining three prominent troughs that formed between September 2023 and April 2024.

Ongoing bullish price action may drive a rally to the $370 region. This is an area on the chart were investors could place sell orders near a multi-month trendline that links multiple peaks and troughs in the stock from June 2023 to May this year.

Neckline Becomes New Support Area

During pullbacks, investors should watch the $265 level, an area where MongoDB shares would likely attract buying interest near the double bottom’s neckline, which also marks Friday’s projected breakout point.

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