Why Nutanix's 18% Decline Shouldn't Surprise Investors

Nutanix (NASDAQ:NTNX) fell more than 18% after reporting earnings below analyst expectations and issuing a weak forward outlook. But while the market reacted sharply to the results, the structure of this decline was already in motion.

Back on 15 July, we analysed Nutanix through its Adhishthana cycle and warned that the stock had entered a descent phase in Phase 11, well before the numbers turned sour. The latest fall simply aligns with the structural setup we highlighted. 

A Quick Recap 

In our earlier commentary, we outlined how Nutanix completed its Cakra formation and broke out in Phase 9, triggering the Himalayan Formation, a three-leg structure consisting of an ascent, peak, and descent.

The ascent unfolded strongly:

• Phase 9 delivered a powerful breakout
  
• Phase 10 extended the rally even further
  

By Phase 11, price action signalled that a peak had likely formed around $83.36. The stock made a final attempt to reclaim that level toward the end of the phase, but fresh selling pressure confirmed the peak. From that point, Nutanix has fallen ~43%, which is entirely normal for a descent leg.

What Comes Next?

Since the stock is firmly in the descent leg of its Himalayan Formation, the natural gravitational point becomes the Cakra breakout level. For Nutanix, that level is approximately $31, and the current selling pressure aligns cleanly with this structural expectation.

Nutanix is now progressing through Phase 12, and a realistic projection is that Phases 12 and 13 will be spent completing the descent, followed by consolidation near the lower zone. The real clarity for the future emerges only when Phase 14 begins, marking the start of the Guna Triads, which determine whether a stock has the potential to deliver a strong Phase 18 rally called as the Nirvana.

Investor Outlook for Nutanix

Back in July, when we issued our cautious commentary, nearly every institutional rating on Nutanix leaned bullish. Ours was the lone analysis highlighting the structural risk of a peak and advising investors to exercise restraint. With the descent leg now firmly in motion, the recent decline may appear attractive to value-seekers, but the cycle does not support that approach yet.

The descent is incomplete until the stock revisits the ~$31 region, meaning new long positions remain premature. Investors who acted on the bearish outlook should consider trailing their stops and securing profits as the structure continues to unfold.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.