Workforce reduction at California offices drags ServiceNow stock below $128.64 support

Traders Union
All News
Stocks
Servicenow drops 3% today to $131.56

Highlights

ServiceNow is eliminating 287 jobs in San Diego and Santa Clara as part of a previously disclosed cost-cutting plan.
Ongoing AI governance debates, profit-taking on high valuation multiples, and increased competition create regulatory and market uncertainty for ServiceNow.
Shares of ServiceNow dropped 3% intraday with strong downside momentum and are expected to trade in a $128.64 to $134.48 range, with further declines more likely than a reversal.

Cost-cutting and regulatory worries drive negative sentiment amid restructuring

ServiceNow is undergoing a workforce reduction involving 287 employees departing from its San Diego and Santa Clara offices under a previously disclosed WARN Act notice, as reported by Investing.com. This restructuring represents a concrete cost-cutting action, potentially shaping short-term investor sentiment through concerns about operational adjustments and future expense management. In parallel, the company faces continued downward pressure from ongoing AI governance discussions, profit-taking on high valuation multiples, and heightened competition, all contributing to a climate of regulatory and market uncertainty. ServiceNow's recently reported annual revenue of $13.28 billion and net profit of $1.75 billion establish its current financial standing but have not mitigated the present headwinds.

Key resistance and oversold signals reinforce weak downside momentum

NOW/USD is currently below the MA-20 at $138.52 and the MA-50 at $137.91 on the hourly chart, while remaining above the MA-200 at $116.63 on the daily chart. The Ichimoku Kijun sits at $138.38 and is acting as immediate resistance. Momentum readings show weak conditions, with MACD indicating a Sell and ADX neutral. Intraday oscillators, including RSI at 36.05, Stochastic RSI, CCI, and Bull/Bear Power, all point to oversold territory. The Awesome Oscillator confirms prevailing downside momentum, with price action holding close to the top of today’s low-volatility range.

Limited upside as breakdown risk rises within current trading band

Over the next few sessions, the expected volatility band for NOW/USD is between $128.64 and $134.48. The probability of an upward move is very low given current momentum, with further downside seen as the more likely scenario. A sideways move within this range is the baseline case; a potential bullish reversal would require a breakout above $138.38, while a move below $128.64 could accelerate selling pressure toward new short-term lows.

Anton Kharitonov, analyst at Traders Union, sees ServiceNow's stock weighed down by confirmed workforce reductions and persistent market uncertainty. The price remains pressured below key moving averages, with momentum and intraday indicators showing little sign of recovery. Current financials offer support, but they have not shifted investor sentiment in the face of cost-cutting and AI-related concerns. "With the stock trading below resistance and no clear shift in trend, I see limited upside until $138.38 is decisively reclaimed."

Earlier, analysts noted that ServiceNow's bullish technical momentum and solid fundamentals supported a positive outlook, with the stock consolidating above key levels. The latest decline below its short-term moving averages, alongside workforce reductions and increased external pressures, signals a shift in the near-term trend, making $128.64 the critical support level to watch for further downside risk.

Source of Data: NOW Price Analysis by TU

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

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.