🎨 Deep Dive: Adobe Beat Earnings — So Why Did the Stock Dump?

What the Market Didn't Like — And What the Chart Is Telling Me Now

Hey traders and investors,

Let’s talk about Adobe ($ADBE). They just posted a record quarter — revenue up 11%, strong free cash flow, upbeat guidance, and a clear push into AI with user metrics that actually show traction.

And yet… the stock dropped.

After an initial pop in after-hours, it reversed hard — closing Friday down -5.32% at $391.68. That’s a $22 haircut in one day.

So what gives? And more importantly — is this just a reset after a big run, or the start of something worse?

Let’s break it down.

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🧾 The Numbers Were Solid — So Why the Drop?

Here’s the quick rundown:

• Revenue: $5.87B (+11% YoY) — All-time high

• EPS: $5.00 (beat expectations)

• Free Cash Flow: $2.15B (37% margin)

• AI Growth:

  • Acrobat link sharing users +20%

  • Adobe Express AI usage tripled

  • Firefly traffic +30% QoQ

  • Paid subs doubled

And they raised guidance:

• Q3 revenue guided to $5.875B–$5.925B (above estimates)

• EPS guidance: $5.15–$5.20 (also above consensus)

The company beat expectations across the board and raised the outlook. So what’s the issue?

Honestly — it’s the chart. Let’s dig into that next.

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📊 Technical Breakdown

Adobe rallied over 25% off the April lows heading into earnings — and sometimes, that’s enough. Expectations outpace results, and you get punished for not blowing the doors off.

🔻 Price Action:

Friday was ugly.

• Gap down, big red candle, heavy volume.

• Price is now back under both the 50-day and 200-day MAs — that’s a failed breakout.

• We're sitting right on key support at $391.68. A clean break here and it opens the door toward the $370–$362 zone.

This chart has shifted from recovery to possible breakdown.

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📉 RSI: 39

We’re no longer in bullish momentum territory.

RSI has faded from the 60s back down to 39, and it’s pointing lower. That tells me momentum is breaking down, and buyers are backing off.

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📈 MACD: Bearish Crossover

The MACD line just rolled over and crossed below the signal line. Histogram bars flipped red — this is classic trend reversal behavior.

Not early. It’s already in motion.

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🎢 Stochastics: 64 and Dropping

Stochastics rolled over hard and are now heading toward the midline. At 64, it’s not yet oversold, which tells me there’s still room for this to keep sliding.

If it breaks below 30, we could see a full flush back to support.

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🔎 Key Levels to Watch

Support Zones:

• $372.01 → First meaningful support

• $362.01 → Lower base, stronger zone

• Below that? It’s trouble.

Resistance Zones:

• $404.51 → Friday’s breakdown level

• $422.01 → Major resistance and 200-day MA overhead

We’re now back in a range. No trend here — just levels.

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💡 How I’d Play It