Stock of the Day: Is This the Bottom for Gen Digital?

Gen Digital Inc. (NASDAQ:GEN) traded lower on Monday. The shares have been in a free fall since the company made a takeover bid for GoDaddy Inc. (NYSE:GDDY). But the shares are approaching a potential support level. We have made Gen Digital the Stock of the Day. In financial markets, there can be support at the same price level that previously served as resistance. This is a common occurrence. It is the result of regretful or remorseful sellers. These are people who sold their shares at the support level and later realized it was a mistake after the price rallied. Some of them also decide to buy back their shares if they can eventually buy them at their selling price. If and when they return to what had been support, they place buy orders. If there is a large quantity of these orders, it will create support at the level again. Examples of this can be seen in the Gen Digital chart. In July, $27 was a resistance level. When this resistance broke, many of the people who sold at it regretted doing so. When the shares fell back to this level in August, some of these remorseful sellers placed buy orders. The large number of these orders created support at the price that had been a level of resistance. A similar situation occurred at the $22.70 level. It was a resistance level in March. This resistance was broken in May. When the shares dropped back to this price in June, remorseful sellers placing buy orders created support. As you can see on the chart, Gen Digital is approaching the $20.50 level. This level was resistance in April. It may convert into a support level, and a move higher may follow. GEN Stock Price Activity: Gen Digital shares fell 3.56% to $20.85 on Monday, according to Benzinga Pro data. Photo: Shutterstock