What's behind Flex's latest 5.6% stock pullback?

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Flex ltd. slides 5.64% today

Highlights

BofA maintains a Buy rating on Flex Ltd., citing strong AI data center business ahead of upcoming earnings.
Artisan Partners notes Flex outgrew its Small Cap Fund mandate due to robust fundamental performance.
Shares trade under short- and medium-term pressure with negative momentum signals; expected five-day range is $103.61 to $118.73, with 71% downside probability.

Positive fund flows offset by continued market skepticism ahead of earnings

BofA reiterated its Buy rating on Flex Ltd. ahead of the company's earnings report. Artisan Partners reported that Flex Ltd. outgrew the Artisan Small Cap Fund’s mandate, attributing this to strong performance from the AI data center business. These developments were noted, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, notes persistent downside momentum in Flex Ltd. despite positive institutional news. He highlights the stock's significant underperformance below both its 20-day and 50-day moving averages, with negative momentum confirmed across RSI, CCI, and Stochastic RSI. Kharitonov sees prevailing seller dominance reinforced by the MACD and ADX signals, while the oversold readings may fail to trigger a technical rebound if selling intensifies below $109.66 support. He remains cautious on the near-term outlook, citing a 71% probability of further losses, and questions whether current bullish ratings truly reflect operational risk. "Short-term risks outweigh the upside as sellers remain firmly in control," Kharitonov warns.

Viktoras Karapetjanc, expert at Traders Union, believes the fundamental case for Flex Ltd. is intact after BofA's Buy reiteration and strong performance from AI data center operations. He views Artisan Partners' comments as validation of Flex's robust growth trajectory and institutional appeal. Karapetjanc argues that the bullish structure remains intact above the 200-day average. He expects further growth potential once the current market correction stabilizes. "Flex is well-positioned for renewed upside as institutional interest supports the long-term story," he says.

Jainam Mehta, market strategist, sees the current setup as tactically interesting. He notes that Flex trades below medium-term averages but holds above the bullish long-term 200-day trend. Mehta thinks oversold oscillators could offer a contrarian trade if positive earnings surprise the market. "A potential breakout above $117.87 resistance may attract tactical buyers watching for reversal signals," Mehta suggests.

Technical breakdown as short- and medium-term momentum remains negative

Flex is trading below its 20-day and 50-day moving averages at $134.48 and $141.54, respectively, but remains above the 200-day average at $86.83. This setup highlights short- and medium-term selling pressure, with the longer-term trend still supported by a bullish 50-day versus 200-day moving average alignment. Nearest support is at $109.66 and resistance is at $117.87. Momentum signals remain negative, as MACD and ADX both indicate a Sell bias. The Relative Strength Index (RSI) is at 38.53, the Commodity Channel Index (CCI) is at -91.31, and the Stochastic RSI is at 13.43, all pointing to oversold or near-oversold conditions. Bull/Bear Power (BBP) at -1.92 signals intraday seller dominance, with the stock trading near session lows and intraday volatility at 9.32%. Overall tone is weak, with sellers controlling the session, in line with momentum readings.

Earlier, analysts noted that Flex faced persistent selling pressure and weak technical momentum despite maintaining a longer-term bullish structure. The latest round of selling, combined with continued negative momentum signals and recent fund activity, reinforces the view that downside risk remains elevated, with traders advised to monitor $109.66 as a critical support level in the sessions ahead.

Source of Data: FLEX Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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