SentinelOne's Technical Breakdown: A 34% Drop vs. Market and Sector

The numbers tell a clear story of relative weakness. While the broader market has held steady, SentinelOne's stock has been a laggard, falling over 34% in the past year. That decline is not just a minor blip; it's a sustained downtrend that has left the stock far behind its peers. This isn't the typical sector rotation where names move in tandem. Instead, it points to a company-specific technical breakdown.

Compare that to the broader landscape. The S&P 500 has shown relative stability, with no mention of a similar multi-year drop. Even within the cybersecurity sector, which is known for its volatility, SentinelOne's performance stands out as an outlier. The stock's 34.1% decline over the past year is a stark divergence from the sector's general movement, suggesting the pressure here is internal, not external.

This creates a classic technical setup. When a stock falls sharply and consistently while its peers and the market hold their ground, it signals a breakdown in buyer interest at key levels. The market is pricing in specific concerns-whether around growth expectations, competitive positioning, or execution-that aren't reflected in the broader sector's sentiment. The result is a clear technical divergence: SentinelOne is underperforming on its own terms, which is often the first sign of deeper trouble before the fundamental story fully catches up.

Technical Anatomy of the Breakdown

The bearish trend is confirmed by a clear sequence of breakdowns. The key trigger was the 11% drop in early trade on Friday following the earnings report. That sharp move broke critical support, shattering the stock's recent consolidation and signaling a decisive shift in momentum from buyers to sellers.

Since that event, selling pressure has been persistent. The stock's 3% decline over the last 7 days and a 2% gain over the last 30 days paint a picture of a market in a downtrend, where even minor rallies are met with profit-taking. This creates a technical pattern of lower highs and lower lows, where each attempt to climb is rejected at a lower level.

The current technical rating underscores this weakness. The stock's overall rating is strong sell, with moving averages pointing firmly down. This isn't a minor pullback; it's a sustained downtrend confirmed across both short and intermediate timeframes. The market is actively discounting the recent guidance miss and leadership change, with no evidence of a technical reversal forming yet.

The bottom line is one of deteriorating momentum. The initial 11% drop broke key support, and the subsequent 3% weekly decline shows that sellers are in control. Until the stock can reclaim its moving averages and show a sustained uptick in volume on up days, the technical setup remains firmly bearish.

Valuation and the Path to Reversal

The technical picture is clear: the path of least resistance is down. The stock's overall rating is strong sell, with moving averages pointing firmly lower. Until price decisively breaks above the recent downtrend line, the setup favors sellers. That said, the valuation score offers a counterpoint. On a 6-point scale, SentinelOne's valuation check comes in at 4 out of 6. This suggests some measures point to potential undervaluation, with a DCF model implying the stock trades at a roughly 36.7% discount to its estimated intrinsic value.

For a technical trader, this creates a tension between price action and fundamental metrics. The market is currently ignoring the valuation discount, focused instead on the deteriorating momentum. A bounce could technically be possible if the stock finds support near its recent lows, but the recent 3% weekly decline shows selling pressure is active. The key is volume: a true reversal signal would require a volume spike on a close above a critical resistance level.

Watch for a volume spike on a close above $15.50. That level sits just above the recent downtrend line and represents a key technical hurdle. A decisive break above it, confirmed by strong volume, would signal that buyers have regained control and could trigger a short-term rally. Until then, the downtrend remains intact. The valuation discount is a long-term consideration, but for now, the technical trader's focus is on the path of least resistance: down.