Nuix share price ASX had a lousy start to the week, extending Friday’s losses. The Nuix stock price was in the doghouse on Monday after crashing 25.74%. The NXL stock was the worst performer in the S&P/ASX 200 index on Monday.
Nuix Limited is an Australian technology company that engages in the development of software platforms for indexing, searching, analyzing, and extracting knowledge from unstructured data. The company has its headquarters in Sydney, Australia, with offices in Asia, the Middle East, and North America.
The Australian software company impressed investors earlier last week after winning a court case against its former CEO Edward Sheehy. The company has been in a five-year battle against Sheehy’s claims that he was entitled to a stock split, seeking $183 million in damages. Nuix’s shares jumped by more than 40% after the court ruled in the favor of Nuix.
However, the rally was short-lived amid speculations by close insiders that Nuix is likely to be dumped by ASIC. According to a report by the Australian Financial Review (AFR) on Monday, the Australian Securities and Investment Commission (ASIC) is “expected to dump Nuix” when the company’s contract is up for renewal in the next month.
ASIC is reportedly distancing itself from Nuix amid ongoing investigations into the company, including ASIC itself. Last year in September, ASIC sued Nuix for breaching provisions of the ASIC Act and the Corporations Act. According to insiders close to the process, other government departments including the Tax Office, and the ACCC are likely to follow ASIC’s lead.
Nuix is under intense pressure to retain clients amid a wave of client defections. AFR’s report saw Nuix share price plunge on Monday.
Nuix Share Price Forecast
Nuix share price has been among the top performers in the S&P/ASX 200 index since the start of the year. The stock has jumped more than 80% in the year to date. On the daily chart, the NXL stock is hovering slightly above the 50-day and 200-day exponential moving averages. It has also remained above the 25-day and 50-day moving averages.
Therefore, I expect the Nuix stock price to continue falling amid client defections. If this happens, the stock is likely to drop to the next support level at A$0.950. However, a flip past the resistance level at A$1.295 will invalidate my bearish view.