Adobe Breaks Out to All-Time High
Adobe Inc. (ADBE) gets less attention than FAANG’s favorites, but the software giant’s returns have been highly competitive, gaining more than 1,800% in the past nine years. The tenth most capitalized component of the Nasdaq 100 joined its peers at all-time highs last week after overcoming a six-week consolidation pattern. Adobe shares have already climbed an impressive 38% in 2020 and could add substantially to those gains in the coming weeks, rising above the psychological level of $ 500.
Adobe’s price action has exceeded Wall Street targets, indicating that stocks may be overvalued right now.
CEO Shantanu Narayen pointed to tailwinds across all lines of business in an Aug. 11 interview, confirming resurgent activity after the first quarter closures. Adobe recently expanded its broad technology footprint, announcing a strategic partnership with International Business Machines Corporation (IBM) and the Red Hat division to “help accelerate digital transformation and strengthen real-time data security for enterprises” through IBM Cloud Services.
Large investors have become more cautious about the long-term outlook for Adobe shares, despite strong tailwinds, with hedge funds led by Keith Meister, David Tepper and Stanley Druckenmiller tapering or closing positions. On the other hand, Dan Loeb’s Third Point just opened a share of 670,000 shares, while Wall Street analysts have maintained a solid “Strong Buy” rating based on 16 “BUY” recommendations and only 5 “Hold”. However, Adobe shares are now trading above the precio 474 price target, significantly increasing the odds of a sell-off.
Hedge funds are alternative investments that use pooled funds that employ different strategies to obtain an active, or alpha, return for their investors. Hedge funds can be managed aggressively or make use of derivatives and leverage in domestic and international markets with the aim of generating high returns (either in an absolute sense or on a specific market benchmark).
The stock failed a break above the 2000 high at $ 43.65 in 2007 and sold at a six-year low during the 2008 economic collapse. It rebounded to resistance in 2013 and exploded, entering a historic breakthrough that remained within a narrow upward channel in a 2017 breakout that increased the price rate of exchange statistics. The uptrend finally stalled in the third quarter of 2018, giving way to the first intermediate correction since 2016.
A June 2019 breakout failed in August, but the stock quickly recovered, posting new highs once again in December. This buying momentum topped at febrero 386.84 in February 2020, giving way to a sharp decline that recorded a 52-week low at marzo 255 in March. The subsequent recovery wave developed at the same angle of attack as the previous decline, completing a V-shaped pattern at the previous maximum in May.
Short-term outlook for Adobe
A June break quickly advanced toward the July high at 4 470.61 and entered a symmetrical triangle pattern that finally broke upward last week. The stock hit an all-time high at lunes 481 in Monday’s pre-market session, just 19 points below $ 500, marking the first bullish target. Given the strong momentum in this late summer rally, the rally could easily exceed that level and trade higher through September.
Even so, technical overbought readings could come into play in the coming weeks, with the monthly stochastic oscillator now at the same level that preceded the first-quarter sell-off. In addition, price action has now extended outside the top of the 20-month Bollinger Band ® for the second month in a row, indicating that gains may be unsustainable while increasing the odds of a decline that undermines the nivel 400 level.