💡Trade Idea – Fri. 6/27/25 PAYX: Snapping Back or Just a Dead Cat Bounce?

Daily Trade Idea – Friday, June 27, 2025

Hey traders and investors —

Today we’re looking at Paychex ($PAYX), and it’s coming off one of the more dramatic moves on my watchlist this week. After getting hammered on earnings, this thing bounced hard — but the big question now is: is this a real reversal, or just a temporary relief pop?

I’ll walk you through everything — what’s driving the move, what the chart’s telling us, and how I’d approach it whether you're an investor, a short-term swing trader, or setting up an options play.

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🗞️ The Backstory: Why the Pop?

So Paychex just reported earnings that missed slightly on revenue, and they offered soft guidance. The market didn’t like that — and the stock got slammed. We saw a gap down and big-volume selloff that broke right through trend support.

But here’s the twist: that oversold flush got met with serious dip-buying. The next two sessions printed strong green candles with rising volume, and now we’re back above the 200-day line.

So is the worst over? Or is this just a pause before more downside?

Let’s pull up the chart.

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🧠 Technical Breakdown: What the Chart Says

We’re trading at $144.33, up +2.35% on the day. Here’s what I’m seeing:

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🔹 Price Action

That giant red candle from earnings sent this thing into free fall — but now it’s rallied back about 3.5% off the lows. We’re sitting right at the 200-day SMA, which is often a battleground level. The next move from here should tell us a lot.

• Support to watch:

  • $133.68 — the low from the selloff

  • $128.68 — deeper support zone from April

• Resistance ahead:

  • $148.56 — short-term ceiling

  • $154.68 — previous high before the earnings dip

  • $161.24 — year-to-date high

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🔹 Moving Averages

• 20-day SMA just crossed below the 50-day — bearish short-term

• 200-day SMA sits right where we are now — if this holds, we could bounce.

• Price is back above the 200-day, but not by much — it’s a critical area to watch.

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🔹 RSI

Currently around 39 — bouncing off oversold territory. That tells me this could be a reversal in progress, especially if we see a push through $148. Anything under 30 is usually too late to sell, so the buyers may have timed it right.

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🔹 MACD

MACD histogram is still in negative territory, but momentum has clearly shifted — we’re seeing a bullish crossover forming. That’s an early signal that the sell pressure may be fading.

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🔹 Stochastics

Now this is where it gets interesting — Stochastics are down near 18, just curling higher. That’s a textbook “oversold” bounce setup. If this continues upward, it could confirm a new short-term leg higher.

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💼 How I’d Trade It

Let’s break it down by style: Investor, Position Trader, Options Trader