Stride Slips After Earnings, But Can It Regain Footing?

Stride (NYSE:LRN) made headlines after plunging over 50% in a single day, following a weak financial forecast that hinted at slowing growth. When analyzed under the Adhishthana Principles, a clear picture emerges of why the stock collapsed, and what may lie ahead. 

Stride and Its Weekly Charts

According to the Adhishthana Principles, stocks typically form a Cakra structure between Phases 4-8, a channel-like pattern with an upward arc that often carries bullish implications. A clean breakout in Phase 9 signals the start of the Himalayan Formation, a powerful bullish leg.

Stride began forming its Cakra in June 2024, trading neatly within its bounds through the early phases. However, on October 27, as the stock transitioned into its Phase 6, it broke below the Cakra, triggering what the framework defines as the Move of Pralaya.

As I explained in Adhishthana: The Principles That Govern Wealth, Time & Tragedy:

"When the underlying breaks the Cakra on the flip side, consolidation typically extends into the Guna Triads. The move that follows is highly significant, and selling pressure can be extremely strong. This is called the Move of Pralaya."

True to form, Stride's breakdown led to a 50% collapse, aligning perfectly with the framework's expectations. This mirrors the setup in IDEAYA (IDYA), which also broke its Cakra on the downside in Phase 6 triggering a fall of ~64%.

Read our related commentary, "Buying IDEAYA Might Be the Wrong IDYA Right Now."

With a Cakra breakdown in play, Stride's outlook has shifted decisively bearish. Such breakdowns often signal deeper structural or fundamental weakness within the company.

Stride and Its Monthly Charts

On the monthly timeframe, the stock is currently in Phase 5. Typically, during Phase 5, a stock retests the lows of its preceding Phase 4 before resuming a rally. In Stride's case, Phase 4 was very bullish, the stock surged from $30 to $105, so a revisit of those lower levels was due. This explains why the current Phase 5 correction has been so intense; the stock is retracing to retest its Phase 4 base in line with the Adhishthana Principles.

Investor Outlook

With a Cakra breakdown on the weekly chart and a Phase 4 retest in play on the monthly, Stride's decline was largely preordained by the framework. Investors looking to buy should wait for the weekly Phase 13 to conclude and monitor how the stock behaves near its Phase 4 lows on the monthly chart. For now, Stride's steps are more cautious than confident.

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.