The market can be a game of musical chairs as it relates to earnings. But when it comes to Spotify Technology (NYSE:SPOT), a repetitive bearish track in SPOT stock continues to be popular with Wall Street.

Earnings can be tough to navigate. Depending on the circumstances, a better-than-feared or straight-up surprising strong report can always draw in fresh buyers. Even worse-than-expected results, in the right environment, can manage to drum up bullish interest.

But that wasn’t the case with SPOT stock following the company’s latest mix at the earnings confessional.

The streaming music giant’s Q1 release saw investors sample a bullish track out-the-gate. But initial enthusiasm quickly turned into a rendition of Michael Jackson’s “Beat It” with SPOT stock finishing up a scant 0.08% after reversing an early gain in excess of 5%.

Ultimately, SPOT stock missed Street earnings forecasts with a wider-than-expected loss of 89 cents compared to expectations of 39 cents. But beyond the spotlight number, Spotify did manage a couple wins. Spotify’s revenues of $1.69 billion came in marginally stronger-than-expected. Analysts had expected sales of $1.64 billion. Paid subscribers was another victory. The company cleared a milestone of 100 million Premium customers on year-over-year growth of 32%.

And internationally, despite label challenges, Spotify’s move into the Indian market has shown some early promise.

So, what gives? SPOT stock’s weakness could come down to Spotify’s unresolved and well-telegraphed E.U. antitrust tiff with tech behemoth Apple (NASDAQ:AAPL), which is a company that’s also continuing to build its own momentum in the streaming music business. Or maybe it’s simply about the price chart?

SPOT Stock Weekly Chart

SPOT stock’s year-to-date gain of nearly 22% is nothing to sneeze at. But Spotify’s rally has come at a price. Nearly all of SPOT stock’s upside performance came in January following the market’s ubiquitous late December corrective low. The remainder of the calendar year has been largely flat. Yet, that’s not the worst of it either.

Shares of Spotify have laid down a couple of lower highs and a lower low pattern after breaking uptrend support and failing to clear the 50% retracement level. That’s bearish.

The relative weakness and threatening price formation has occurred since SPOT stock filed its E.U. complaint against Apple. This suggests investors are less-than-confident in Spotify’s chances to come out on top. Now and on the heels of a rather weak-looking earnings reaction, SPOT stock has formed another lower high with a supportive-looking stochastics backing the position. All told, the case for a more bearish downtrend to emerge and opportunity to profit from a short in Spotify shares has increased.

Shorting SPOT Stock

For investors comfortable with shorting stocks, there’s enough evidence in place to suggest SPOT stock is ready for positioning today. However, regardless of where one sees an entry in Spotify, either short or long, a recent victory against Apple by Qualcomm (NASDAQ:QCOM) is an important reminder that increased gap or fast-market risks exist in Spotify.

Ideally and without heightened news-driven risks, I’d recommend short positions simply use a failure of Monday’s lower-high pivot to close the bearish bet against SPOT stock. But in a less-perfect world, using a limited-risk bear put spread or buying a protective call to hedge the short SPOT stock position are smarter-looking necessities.

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