Datadog is a buy as it indicates early signals of a bullish pattern

Datadog Inc. (NASDAQ:DDOG) is trading at $110.08 and is bullish. This week, the stock gained 12.25%. Last week the share appreciated by 3.46%. With more than 15% gains in only two weeks, the stock is attracting investors’ attention.

Datadog is a large-cap growth stock in the cloud business. Compared to small-cap growth stocks, large growth equities have a lower risk. The characteristic makes the large growth stocks a good addition to the portfolio, especially in a declining market.

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The company is A-rated for growth and momentum. The latest earnings release, which was just a month ago, confirms a strong growth potential. The earnings per share grew from $0.06 to $0.24. Analysts had projected the EPS at $0.11. The company maintains strong guidance for the year. As a momentum stock, Datadog is expected to perform in accordance with the recent price patterns. The 52-week low is at $82, while the high is $199. Analysts expect that the stock will move to re-establish these levels. Our analysis projects that the stock will stabilize between $150 and $165.

Datadog is headed for a price rally as MACD turns upwards

Analysis of the share price shows that Datadog has support at $95. The analysis also shows that the stock is building bullish momentum. The analysis confirms that the stock has reversed the decline with net gains over two straight weeks. The divergence between the MACD line and the signal is reducing. This shows that the stock has set off the early signals of a bullish rally.

Summary

This analysis recommends buying Datadog shares. The stock has adopted a bullish pattern towards the 52-week high of $199. This analysis sets the most conservative valuation between $150 and $165.

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