From SIA Charts
1/ Docusign Inc. (DOCU)
2/ Candlestick Chart
3/ Point and Figure Chart
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1/
Docusign Inc. (DOCU)
Courtesy of SIA Charts
From the company that brought e-signatures, DocuSign Inc. is now at the forefront of another leading solution called Intelligent Agreement Management. This solution leverages the power of AI to extract value from the otherwise trapped information buried within corporate agreements, which Deloitte estimates costs US$2 trillion in global economic value each year. While every organization depends on agreements for many vital day-to-day activities, the processes that manage them are slow, manual, and error-prone, leaving critical business data trapped. DocuSign is addressing this global challenge. Given the massive pullback in the share price of DOCU over the past several years and the SIA’s detection of growing relative strength, SIA practitioners might wish to revisit the stock with fresh eyes. In 2021, DocuSign was a market favorite as the company experienced rapid growth due to the rise of remote work during the pandemic. However, in late 2021, after reporting its sixth straight period of revenue growth of over 40%, DocuSign warned that upcoming quarters might show only around 30%. After being bid up to lofty levels during the COVID work-from-home mandates, the shares were vulnerable to even slight disappointments. The shares then gapped down massively, with a one-day drop on December 1, 2021, of over 40%.
2/
Candlestick Chart
In the first attached daily candlestick chart, this gap down is visible on the far left of the chart, just below the red circle, which outlines the red candles that illustrate the position of DOCU shares within the SIA Russell 1000 Index Report prior to the massive selloff. According to SIA’s rules-based methodology, owning these shares would have been avoided, as only stocks in the upper zones of the SIA Reports are favored, while those in the Unfavored Red Zone, such as DOCU at the time, are avoided. The chart also shows the retracement of the share price into 2022, followed by a multi-year consolidation. However, last month, the shares appear to have perked up. The now-favored position of the shares within the SIA Russell 1000 Index Report is highlighted (see green circle), along with a full list of all reports where DOCU shares are a member. These reports show that DOCU shares are highly ranked and positioned in the Favored Green zones across all these reports.
The candlestick chart also features a rectangle red zone of resistance added to the lower level of the gap down, as this level may prompt sellers who were trapped during the selloff to exit their positions after being underwater for several years.
Courtesy of SIA Charts
3/
Point and Figure Chart
The final chart attached presents a point-and-figure chart of DOCU, highlighting several important data points, such as support and resistance levels and trend lines. Note the red negative trend line, which has recently been broken by the rally past $80. Support levels begin at $78.00 (3-box reversal level), followed by $66.57 and $62.73. Resistance now stands at $93.21, with upper resistance at $111.40. Engaged on the chart is DOCU’s matrix position within the SIA Russell 1000 Index Report, which has moved to the favored green zone this past month. Additionally, DocuSign is a member of the Favored Computer Software sector and has a perfect SMAX score of 10 out of 10, further underscoring its potential for near-term outperformance compared to other asset classes.
Courtesy of SIA Charts
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Originally posted 3rd December 2024
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