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Airbnb Inc (NASDAQ:ABNB) is facing a rough patch as it nears a Death Cross, a bearish technical signal that has traders concerned. Following a disappointing earnings report, Airbnb's stock has been on a downward spiral, raising questions about its immediate future.
Chart created using Benzinga Pro
Airbnb on Tuesday released its second-quarter earnings, showing a 10.63% increase in revenue year-over-year. However, earnings per share came in at 86 cents, missing analyst expectations.
The company also issued weaker-than-expected guidance for the third quarter, with projected revenue between $3.67 billion and $3.73 billion, falling short of the $3.836 billion consensus estimate. Airbnb expects a slowdown in the growth of Nights and Experiences Booked, which has further dampened investor sentiment.
This combination of weak financial performance and gloomy forecasts has led to a sharp sell-off, with Airbnb’s stock falling 21.08% over the past year, 16.99% year-to-date, and 26.61% in just the last month. Over the past five trading days, the stock has dropped an additional 12.05%, largely due to the earnings miss.
Read Also: What’s Going On With Airbnb Stock After Earnings?
The technical indicators paint a bleak picture. Airbnb’s current stock price is significantly below its key moving averages, indicating a strongly bearish trend.
Chart created using Benzinga Pro
The 50-day moving average is about to cross below the 200-day moving average, forming a Death Cross. This pattern is often interpreted as a sign of further potential declines.
Chart created using Benzinga Pro
The Moving Average Convergence Divergence (MACD) at -6.56 and the Relative Strength Index (RSI) at 20.89 indicate that the stock is oversold. Although this often suggests that a rebound might occur, in this context, these indicators reinforce a bearish outlook, as the downward momentum remains strong.
Additionally, the Bollinger Bands highlight a negative sentiment surrounding the stock.
While some investors might see this as a buying opportunity given the oversold conditions, the consensus points to caution. With multiple analysts lowering their price targets, Airbnb may continue to face headwinds, making the Death Cross a signal of challenging times ahead.
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Posted In: ABNB
