Atlassian Corporation Plc (TEAM) shares fell 5% during Tuesday's session after failing to break through upper trendline resistance earlier this month. The move comes as the company increases prices for most of its products this month, including Jira, Confluence, and Bitbucket. New customers could see the biggest price increases, with some licenses costing up to 180% more than before the price increase. Existing customers could see their licensing costs rise a more modest 15% for most products.
SunTrust initiated coverage on Atlassian stock on Oct. 2 with a Buy rating and $162 price target, representing a roughly 30% premium to the current market price. In September, William Blair reiterated its Outperform rating on Atlassian stock, saying that the price hikes were more drastic and broader than expected but that the company will remain a price leader in the market.
From a technical standpoint, the stock broke down from trendline resistance and the 50-day moving average at $134.83 toward trendline support near the 200-day moving average at $119.07. The relative strength index (RSI) remains neutral with a reading of 43.6, while the moving average convergence divergence (MACD) continues to trend sideways. These indicators suggest that there's still a lot of indecision in the market.
Traders should watch for consolidation between trendline support and resistance over the coming sessions. If the stock breaks out from trendline resistance, traders could see a move toward prior highs of around $150. If the stock breaks down from trendline support, traders could see a move to reaction lows near $100 made in mid-June. The descending triangle pattern suggests a bearish bias over the intermediate term, but traders will be keeping a close eye on the company's upcoming earnings report on Oct. 17.
The author holds no position in the stock(s) mentioned except through passively managed index funds.