ServiceNow (NOW) shares fell 10% in early trading after its latest earnings report. Earnings per share were $0.97, in line with estimates, and revenue was $3.77 billion, slightly above forecasts.<\/p>\n
The company\u2019s forward guidance pointed to margin pressure and ongoing concerns around AI software. The stock was trading near $90 at the time referenced.<\/p>\n
Technical analysis in the text identified a support zone at $71 to $68 per share. This area was linked to a trendline pivot low from 2022\u20132023 and to a declining wedge pattern.<\/p>\n
The wider market was described as being at all-time highs in the same period. A 10% fall in the S&P 500 was cited as a potential trigger that could push ServiceNow towards the $71\u2013$68 range.<\/p>\n
The approach described was to avoid taking a position and wait for the share price to reach the stated support level. This was framed as a risk-control measure based on price action.<\/p>\n
Given the weak forward guidance we saw in the late 2025 earnings report, a direct bet on further downside is a clear first step. Buying put options with strike prices around $80 or $75 would allow us to profit as the stock falls from its current $90 level. This move anticipates a broader market correction, as the S&P 500’s P\/E ratio at that time was hovering above 21, a level historically vulnerable to pullbacks.<\/p>\n
The concerns over margin compression were not new to us, as reports throughout 2025 showed rising competition in the AI software space was forcing higher research and development spending. Federal Reserve commentary at the time also signaled a “higher for longer” interest rate environment, which tends to punish growth stocks with high valuations like ServiceNow. These macro factors support the case for a continued slide in the share price.<\/p>\n
For those looking for a more conservative trade, a bear call spread offers an alternative. By selling a call option above the current price, say at $95, and buying a further out-of-the-money call, we can collect a premium. This strategy profits if the stock moves down, sideways, or even slightly up, making it a high-probability trade if we believe the stock will not rally strongly in the near term.<\/p>\n
However, the most compelling strategy is to use options to get paid while we wait for the price to hit that key $68-$71 support level. We should consider selling cash-secured puts with a strike price of $70, expiring in the next several weeks. This approach allows us to collect income immediately from the option premium.<\/p>\n
If the stock never drops to $70, we simply keep the premium and can repeat the trade. But if the market does pull back and push the shares down, we get to buy the stock at our target price, which is a major support pivot we identified from the 2022-2023 trading period. This effectively lets us set our entry price while generating income.<\/p>\n","protected":false},"excerpt":{"rendered":"
ServiceNow slid 10% after earnings; guidance warned of margin pressure. Analysts await $71\u2013$68 support zone.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-45718","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45718","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=45718"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45718\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45718"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45718"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45718"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}