Adobe Stock Price Rallies On Guidance But Breakout Unlikely (ADBE)

Steve Miller

Adobe Systems (ADBE) rose by 4% on Tuesday, after the company updated its annual guidance, which led multiple analysts to update projections higher.

While the stock is in the rising phase of its current market cycle, we see the depth of the last decline is a negative warning.

The company updated its guidance for FY 2020 to earnings of $9.75 per share and revenue of $13.15 billion, compared to analyst estimates of $9.70 and $13.14 billion.

Adobe CEO Shantanu Narayen explained that, “Our strategy to unleash creativity, accelerate document productivity and power digital businesses is driving our growth and represents a $128 billion opportunity in 2022.”

Our approach to stock analysis uses market cycles to project price action.

Adobe System’s stock price is still in the rising phase of its current cycle. Yet it is approaching a resistance zone between $293-301 where it may slow down.

While it is more likely that ADBE is forming a major top than getting ready to breakout, it is too early in this cycle to call for it to turn around.

Adobe Systems (ADBE) Stock Weekly Chart 

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