Chewy trims gains - Analysis - 03-06-2022

Chewy's stock (CHWY) rose in a volatile session after the pet food company reported a quarterly profit of $0.04, down from $0.09 a year ago, with analysts expecting a loss of $0.13, on sales of $2.43 billion, up from $2.14 billion a year ago. 

Technically, the stock marked a session-high at 29.47 before bouncing off it lower and tested the main downward short-term trend line, while hitting the resistance of the 50-day SMA, forcing the stock to trim gains to 24.22%, or 5.69 points, and settled at 29.18, with trading volumes surpassing 49 million shares, above 10-day averages of 10.3 million shares, with negative signals from the RSI after reaching overbought levels. 

Therefore we expect the stock to return lower, targeting the pivotal support of 22.22, provided the resistance of 36.70 holds on.

Expected trend for today: Bearish