Today, we highlight DigitalOcean Holdings (DOCN), a mid-cap company in the software space:
DOCN recently broke out above resistance extending back to the March high, and has risen over 20% in just a couple weeks. The rally has resulted in the weekly stochastics becoming newly overbought, but positive intermediate-term momentum is absorbing these overbought conditions.
After having cleared the weekly cloud, the breakout from a consolidation phase has helped improve DOCN’s monthly MACD. It is now “pinched” higher towards a “buy” signal, which could provide a positive long-term catalyst.
Our price objective for DOCN is $52, which is near long-term resistance that extends back to May 2022 and opportunistically about 25% above the current price. A stop-loss can be placed near support of ~$37, to be revised higher as needed.
DigitalOcean Holdings Inc (DOCN, $41.50)
Target: $52.00
Stop-Loss: $37.00