Pandora Media, Inc. (P) shares fell nearly 4% on Monday following a sharp decline in the wider technology sector. Despite the $480 million strategic investment in September by Sirius XM Holdings Inc. (SIRI​), Pandora stock has fallen more than 12% over the past month and nearly 45% so far this year. The strategic investment put three Sirius XM executives on Pandora's board and left Sirius with a roughly 20% stake in the currently outstanding shares via convertible preferred stock.

Last quarter, Pandora reported revenue that increased just 6.3% to $316 million – missing consensus estimates by $2.15 million – while a 24 cent per share loss beat consensus estimates by ten cents per share. Stifel analysts believe that the Sirius investment represents a move in the right direction, and in late September, they reiterated their $12.00 per share price target on Pandora, which represents a significant 66% premium to the current market price. (See also: Pandora Media Shares Climb After New CEO Announcement.)

Technical chart showing the performance of Pandora Media, Inc. (P) stock

From a technical standpoint, the stock broke down from trendline support at $7.50 and S1 support at $7.29. The relative strength index (RSI) moved to oversold levels of 28.92, but the moving average convergence divergence (MACD) remains in a sideways trend. Traders should maintain a bearish bias on the shares over the long term and intermediate term, but Pandora stock could see a short-term rebound as it moves deeper into oversold territory.

Traders should watch for a rebound from S1 support to retest trendline resistance at $7.50 or a breakdown to S2 support and prior lows at around $6.87. The oversold RSI reading suggests that a period of consolidation is likely over the near term, but the long-term trend remains decidedly bearish, as the stock has trended lower since late July. (For more see: Pandora Stock Struggles to Regain Momentum.)

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

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