Mastercard Incorporated (MA) shares fell more than 6% during Wednesday's session after the company reported a 30% decline in cross-border volume on a local basis as part of its third quarter financial results.

Key Takeaways

  • Mastercard shares fell more than 6% after it reported a 30% decline in cross-border volume on a local basis as part of its third quarter financial results.
  • Domestic spending has shown signs of improvement, but travel spending remains challenging as the global economy heads toward further lockdowns.
  • The stock has moved into oversold levels over the past couple of sessions, but the intermediate-term trend remains bearish for the time being.

Third quarter revenue fell 13.7% to $3.84 billion, missing consensus estimates by $110 million, while non-GAAP earnings came in at $1.60 per share, missing consensus estimates by $0.06 per share. Purchase volume came in at $1.24 trillion versus a $1.11 trillion consensus, while gross dollar volume was $1.65 trillion versus a $1.61 trillion consensus.

Chart showing the share price performance of Mastercard Incorporated (MA)
TradingView.com

From a technical standpoint, Mastercard stock broke down from its 200-day moving average at $304.14 during Wednesday's session. The relative strength index (RSI) fell to oversold levels with a reading of 25.52, but the moving average convergence divergence (MACD) remains in a bearish downtrend. These indicators suggest that the stock could see some consolidation before potentially moving lower over the intermediate term.

Consolidation is a technical analysis term referring to security prices oscillating within a corridor and is generally interpreted as market indecisiveness. Said another way, consolidation is used in technical analysis to describe the movement of a stock's price within a well-defined pattern of trading levels.

Traders should watch for consolidation around trendline support near $290.00 over the coming sessions. If the stock breaks down, traders could see a move toward Fibonacci support levels near $270.26. If the stock rebounds, traders could see a move toward trendline resistance at around $325.00.

The Bottom Line

Mastercard shares fell more than 6% during Wednesday's session after the company reported a 30% decline in cross-border volume on a local basis as part of its third quarter financial results. With share prices reaching oversold levels, traders could see some consolidation before the stock resumes its intermediate-term trend lower.

The author holds no position in the stock(s) mentioned except through passively managed index funds.