Yesterday, Adobe stock (ADBE) prices ended at a new 52-week high, gaining 6.7% since the beginning of the month.
Over three months, Adobe shares added 27% in value. The company announced the publication of financial results for Q4 2019 on March 12. Wall Street analysts expect a robust quarterly report with earnings growth per share up 30% (YoY) to $2.23.
During the previous week, Adobe shares grew by 2.01%. S&P500 went up by 1.17% within the same period.
4 Reasons to Buy Adobe Stock (ADBE)
Adobe stock has shot up like a rocket. Although there is always a strong possibility of correction and we prefer to buy on the dip, there are several reasons to buy Adobe stock. Here are my four top reasons.
- Earning Growth – Historically, the EPS is 52%.
- Cash Flow King – Adobe YOY cash flow is 27% vs. 8.4% for the industry.
- Promising Earnings – Wall Street is forecasting very positive results.
- Bullish Technicals – Virtually all the technical indicators are positive.
Stock Market Today –
Yesterday’s US Inflation Data was positive in general, since the consumer price index, excluding volatile indicators, rose from 0.1% to 0.2% for January, and on an annualized basis, contrary to market expectations, remained at the previous level of 2.3% without falling. Rental payments and the cost of clothing grew most of all.
Today investors are waiting for the publication of data on retail sales and industrial production in the United States.
If the growth in retail sales is expected to remain the same – 0.3%, then industrial production may decline for the second time in a row, this time by another 0.2%, which may put pressure on the dollar.
Probably, GBP is experiencing a technical pullback after a significant strengthening the day before. The resignation of Chancellor Sajid Javid is still in the spotlight of investors. Experts believe that its real reason lies in the disagreement of Javid and Prime Minister Boris Johnson regarding the increase in government spending.
The official who left the post advocated its every restriction. The new Chancellor is the former Chief Secretary to the Treasury Rishi Sunak.
The market expects him to deviate from his predecessor’s policies and increase budget spending, which should stimulate economic growth. The draft of the first UK budget after the country’s exit from the EU should be submitted in March.
Crude oil is edging higher today. Oil prices are supported by comments by US Secretary of Energy Dan Brouillette, who told Reuter that the coronavirus epidemic in China has little impact on energy markets and is unlikely to affect black gold quotes significantly, even if demand in China drops by 500K barrels per day.
Meanwhile, Russia has not announced the decision upon the new reduction in oil production. According to Fitch, Russian companies are opposed to the decrease, but a compromise may be to limit production not yet to 600K but to 300K barrels per day.
Adobe Stock Support and Resistance
Adobe shares continue to show a steady uptrend. Currently, the stock is testing the resistance level of 377.00. 358.00 is a “mirror” support level. There may be in the future technical correction, followed a strong bull trend.
Indicators show a strong bull trend of the: the price is above MA(50) and MA(200); MACD is in the positive zone. Linear Regression and all 1 day moving averages are positive.
Support levels: 356.00, 340.00, 325.00.
Resistance levels: 377.00.
Adobe Stock Price Recommendations
Jan-27-20 Upgrade Cleveland Research Neutral → Buy
Jan-17-20 Upgrade Oppenheimer Perform → Outperform $410
Dec-13-19 Reiterated Griffin Securities Buy $330 → $334
Dec-13-19 Reiterated BMO Capital Markets Outperform $350 → $358
Dec-11-19 Reiterated BMO Capital Markets Outperform $300 → $350
Nov-13-19 Resumed Piper Jaffray Overweight $339
Oct-21-19 Reiterated BMO Capital Markets Outperform $310 → $300
Oct-16-19 Downgrade Citigroup Buy → Neutral $322 → $313
Oct-15-19 Initiated Cleveland Research Neutral $283
Sep-18-19 Reiterated Griffin Securities Buy $303 → $317
Sep-18-19 Reiterated BMO Capital Markets Outperform $315 → $310
Sep-13-19 Resumed RBC Capital Mkts Outperform
Jun-19-19 Upgrade Stephens Equal-Weight → Overweight $288 → $327
Jun-19-19 Reiterated BofA/Merrill Buy $312 → $323
Jun-19-19 Reiterated BMO Capital Markets Outperform $300 → $315
Apr-29-19 Upgrade Morgan Stanley Equal-Weight → Overweight $282 → $340
Mar-15-19 Reiterated Canaccord Genuity Buy $290 → $300
Mar-15-19 Downgrade KeyBanc Capital Markets Overweight → Sector Weight
Feb-15-19 Downgrade Cowen Outperform → Market Perform $280
Jan-17-19 Initiated Stephens Equal-Weight
Adobe Stock 1 Day Moving Averages – Strong Buy
Name Value Action
Exponential Moving Average (5) 371.28 Buy
Simple Moving Average (5) 370.90 Buy
Exponential Moving Average (10) 366.91 Buy
Simple Moving Average (10) 366.34 Buy
Exponential Moving Average (20) 359.36 Buy
Simple Moving Average (20) 358.58 Buy
Exponential Moving Average (30) 352.61 Buy
Simple Moving Average (30) 351.88 Buy
Exponential Moving Average (50) 341.03 Buy
Simple Moving Average (50) 338.32 Buy
Exponential Moving Average (100) 322.42 Buy
Simple Moving Average (100) 310.52 Buy
Exponential Moving Average (200) 302.87 Buy
Simple Moving Average (200) 299.10 Buy
Ichimoku Cloud Base Line (9, 26, 52, 26) 355.56 Neutral
Volume Weighted Moving Average (20) 358.57 Buy
Hull Moving Average (9) 374.43 Buy