LVGO: A buyout is coming and that could mean this has a floor underneath it. (September 23, 2020)
LVGO SPY QQQ GDX LVGO TDOC LVOAX LVGO
This is Scott with your Chart of the Day. I want to take a look at Livongo ( NASDAQ: LVGO ). If you look at the major indexes today it was a pukefest. The S&P 500 ( INDEXSP: .INX ), yikes. QQQ ( NASDAQ: QQQ ), yikes. GDX ( NYSEARCA: GDX ), yikes; just a lot of ugliness out there.
Meanwhile, you take a look at Livongo ( NASDAQ: LVGO ) and it doesn’t look like anyone panicked out today. If I bring in the volume indicator here, there is less than average selling volume. So no real fear in this chart right here, right now.
The thing is, this company, as you may know, is merging with Teladoc ( NYSE: TDOC ). So Teladoc ( NYSE: TDOC ) and Livongo ( NASDAQ: LVGO ) are coming together and Livongo ( NASDAQ: LVGO ) is being bought out at a price of 159.00, at least that is what I kind of saw, 159.00 per share. And so they are giving you a bunch of Teladoc ( NYSE: TDOC ) shares and then a special dividend, I think it’s like $11.00. But the price of this stock right now is 134.00 and so if I am looking at 159.00, that’s about 18 percent higher than what it is right now.
And so because of that I believe there is probably going to be an underlying bid on Livongo ( NASDAQ: LVGO ) that will stop it from crashing down through the 50-day moving average; because as long as this deal goes through that money is coming into holders of this stock.
Now technically, as I said, it looks pretty good. It’s above all the major moving averages, you can see how it has support down here at the 50-day moving average. And despite the fact there is a buyout coming I still believe it has a possibility to break out because it’s kind of getting tight here.
If I draw a downwards sloping trendline you can see how from this day that they announced the deal, you can tell the market wasn’t really sure about it and then it kind of evened out a little bit. But we have resistance, resistance, resistance. We tapped against it today but we didn’t breakdown completely. As I mentioned, we are still above all of the major moving averages and today’s pullback was on less than average volume.
So there is still a chance that we could see higher prices here on Livongo ( NASDAQ: LVGO ). So I think it is worth having an alert at around $140.00. But definitely keep an eye on this, because like I said, the buyout price is 159.00. It’s not there now and so this could definitely be a stock that stays SOLID throughout this market volatility.
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