Xero Share Price Could Start to Flatten Out (ASX:XRO)
Xero, an online accounting and business software provider, experienced a rapid rise back from the March low. As more and more people have been forced to work from home, companies that occupy the fintech space have profited handsomely.
But is this coming to an end?
Trading at $89.51 at the time of writing, the Xero Ltd [ASX:XRO] share price looks to be slightly coming off the boil, as do some of the other tech companies that saw their share prices rocket up through the pandemic.
What’s Happening at Xero?
We investigated Xero back in May 2020, like most listed companies, Xero experienced a major drop in stock price through February and March, in line with the onset of COVID-19.
COVID-19 caused a chain reaction in the way we all live and work globally.
With the virus being easily passed from person to person, this forced many businesses to get their staff to work from home to slow the infection rate.
The virus also caused unemployment to skyrocket, with Australia’s reported unemployment figure now over one million.
This forced the Federal government to put programs into place to support the nation, in the form of doubling the JobSeeker payment and the JobKeeper initiative.
While people have been at home, they have been spending — online.
But how long can the run up last…?
By looking at the charts of the three companies mentioned above and comparing them to Xero, we can see that they are slowly starting to taper off in the growth of their respective share prices.
With it now being reported that consumer confidence and wage growth are incredibly low, people may be starting to tighten the purse strings.
What Does This Mean for the XRO share price?
Recently we looked over the new product from BetaShares — its ATEC fund. A lot of the companies in this fund experienced enormous growth through the pandemic, so it makes sense that they may all be in line for the same fate.
With consumer confidence drying up, and more and more people becoming unemployed, the run-up may just be over.
For Xero, with the share price sitting just below the resistance level of $90.25, and seemingly declining in increasing volume, a fall in price may already be underway.
If so, then the levels of $84.75 and $78.95 may provide future support for a fall. For price to be considered bullish in the short term, it would need to move back up above $90.25 and start making its way towards $95.45, around the current all-time high.
For Money Morning
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