Spotify board expands share buyback: Can SPOT avoid further losses?

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Spotify drops 3.12% to $513.99 today

Highlights

Spotify's board expanded its share buyback program by $1.5 billion, increasing total repurchase capacity to $2.22 billion.
The third-quarter earnings report is scheduled for October 22, introducing uncertainty and potential positioning shifts.
Shares of Spotify trade below key short-term averages with selling momentum dominant and an expected range of $503.09 to $524.89 over the next few days.

Buyback expansion and earnings uncertainty drive positioning shifts

Spotify's board raised its share repurchase authorization by $1.5 billion, bringing the total buyback capacity to about $2.22 billion and enabling increased capital return to shareholders. This decision provides the company with greater flexibility to reduce its share float, which can influence per-share valuation and support liquidity. Additionally, the upcoming third-quarter earnings report scheduled for October 22 introduces an element of uncertainty and may drive positioning shifts, according to Investing.com. These recent developments have unfolded while price action has remained under broader selling pressure.

Mixed momentum as resistance levels clash with oversold signals

SPOT is trading below both the MA-20 and MA-50 on the hourly chart, highlighting short- and medium-term levels of resistance. The price remains above the MA-200 on the daily timeframe, while the Ichimoku Kijun level at $524.12 marks immediate resistance. Momentum indicators are mixed: MACD and ADX remain neutral, while RSI is in sell territory at 37.69, and both Stoch RSI and CCI confirm oversold conditions. Bull/Bear Power, however, indicates buyer dominance, even as the Awesome Oscillator continues to favor selling; these conflicting signals highlight a notable divergence.

Downside risk elevated as range-bound outlook dominates near term

In the very near term, SPOT is expected to trade within a range of $503.09 to $524.89, reflecting the asset's volatility band relative to current levels. Upward movement has a very low probability, while the likelihood of additional downside remains high. The base case calls for SPOT to oscillate within this corridor. A clear bullish scenario would require a sustained breakout above $524.12 resistance, while a bearish scenario could develop if support at $503.09 is breached.

Anton Kharitonov, expert at Traders Union, sees Spotify's recent expansion of its buyback program as a constructive fundamental step but notes that technical factors remain unsupportive. He points out that the stock is trading below key short- and medium-term averages, with resistance and oversold indicators aligning for further caution. Near-term volatility is likely to remain high as the earnings date approaches and selling pressure continues. "Until SPOT regains $524.12 with conviction, I remain cautious and see a higher risk of downside in the current range."

Earlier, analysts noted that Spotify retains long-term growth potential driven by diversified revenue streams, while cautioning that quarterly results could introduce heightened volatility. The current technical outlook underscores the importance of the $503.09 support and $524.12 resistance levels, as a decisive move beyond this range could establish the next directional trend.

Source of Data: SPOT 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.