Paycom Software Inc

Under the High Quality Dislocated Assets strategy, PAYC is in a Stage 2 advance within a broader secular downtrend but has formed a blow-off top on high volume at the declining 200DMA. Extreme overbought conditions and a rejection candle signal exhaustion and overhead supply. We anticipate distribution and a pullback into the rising 9/21 EMAs. Given these factors, bearish execution is warranted now; sell into the rejection at resistance and monitor for a decisive breakdown below the EMAs.

• ↑Q1 revenue $572M (+8% YoY) and EPS $3.15 vs $2.99 est.
• ↑Recurring revenue $544M (+9% YoY) with 48.2% adj. EBITDA margin.
• ↓Negative earnings yield suggests valuation above profit levels.