Slack Stock Works Its Way to Record Lows

Bear notes and bad earnings have weighed heavy on WORK

Slack Technologies Inc (NYSE:WORK) is up 1.6% at $21.34 this afternoon, a rare shift higher for the software stock. In fact, following a disappointing quarterly report, bear notes, and uninspiring user stats, the security has shed more than 45% since its public trading debut in late June. Pressuring the shares has been the newly formed 40-day trendline, and history suggests there may be even more downside in WORK's near future.

Specifically, data from Schaeffer's Senior Quantitative Analyst Rocky White shows that WORK is trading within one standard deviation of its 40-day moving average, after spending nearly all of its time below this trendline in recent months. Similar tests of this trendline resistance have occurred one other time since its formation in August, resulting in a three-month loss of 20.4%. Another plunge of this magnitude from current levels would put Slack Technologies stock below $17, in new record-low territory.

Shorts look to be targeting the software stock, too. Short interest charged 46% higher during the past two reporting periods, and now accounts for 22% of the equity's total available float. At WORK's average pace of trading, it would take shorts almost a full week to cover their bearish bets.

Slack Technologies also looks to have plenty of room for downgrades. Coming into today, more than 50% of covering analysts sport a "strong buy" rating. Any bearish notes from this group could easily accelerate the stock's imminent rejection from 40-day resistance.