Charting The Asana Rally: Earnings Season Isn't Over Yet

Second-quarter earnings season is not quite over yet, as Asana Inc ASAN announced earnings after the close on Wednesday. The price action following the work management software company's report makes it the PreMarket Prep Stock of the Day.

Asana's Rough August: Asana’s stealth rally off its July 19 low ($16.19), which matched three other lows in that area, came to an abrupt end Aug. 11 at $29.51. That came in just under its May high of $30.48.

After reversing the course, it only took the stock seven sessions to get back down to $20. It took another leg lower and did not find a bottom until Sept. 1 at $17.04 and rebounded to end the session at $17.82.

Bargain Hunters, Short Covering Ahead Of The Print: Following the rapid decline, buyers congregated at the $18 area over the next three sessions. 

The issue had a good day on Tuesday, gaining 73 cents, and adding another 15 cents to end Wednesday's session at $19.04.

Related Link: 3 Asana Analysts On Earnings: Better Than Expected, But 'Continued Deceleration And More Macro Headwinds To Surface'

Asana's Q2 Report: After the close on Wednesday, the company reported quarterly losses of 34 cents per share, which beat the analyst consensus estimate of a 39-cent loss by 12.82%.

The company reported quarterly sales of $134.9 million, which beat the analyst consensus estimate of $127.24 million by 6.02%.

The company forecast third-quarter EPS and FY23 EPS and sales to be slightly higher than Wall Streat estimates.

PreMarket Prep's Take: When the issue was being covered on the show, it was trading higher by over $4 at the $23.50 area.

The premarket high at that time was $24.26. The author of the article noted the significance of the premarket high coinciding with its Aug. 19 high ($24.33).

Above that level, the issue had a void in price to fill up to $24.64, which marked the low on Aug. 18.

The following day, the issue swooned from $25.06 to $21.97, which instigated the move to the recent low.

ASAN Price Action: After a higher open Thursday ($22.55 vs. $19.04), the issue spiked lower in the first few minutes but found support well ahead of the top of Wednesday’s range ($21.42 vs. $19.16).
The ensuing rebound off that low surpassed the gap fill area ($24.80), but could not hold at that elevated level.

The software stock ultimately gained 24.53% Thursday, closing at $23.76. 

Watch Thursday's PreMarket Prep show here: 

Photo courtesy of Asana.