AI Footwear Winner?

  • Of course, the above statement is a weak stab at humor, but the chart below shows how closely DECK has been trading to NVDA since the late October lows last year. Each has essentially doubled in PRICE and one should expect these leaders to continue to flex their muscles because we know that stocks once in motion, whether up or down, tend to remain that way, more likely than they are to reverse. In the small footwear niche arena DECK is not surprisingly being held hostage, most likely temporary, to round number theory. A bull flag is now in place and a move above 900 carries a measured move to 1050. CROX is sporting a bull flag formation of its own and a move through 120 could see a target of 145. BIRK is attempting to solidify itself above the very round 50 number and Friday almost precisely retested a double bottom trigger of 50.29 taken out on 2/12 (former resistance at the round 50 figure now looks like support). SHOO is north of its double bottom pivot of 43.68 taken out on 2/15.

China Greenshoots?

  • With the amount of bearish chatter recently about China one must be looking for an opportunity to take the other side, even if one of my mentors always expressed to me consensus is usually right. If one was to take a peek at the casual diners a good temperature gauge may be a peek at the YUM:YUMC ratio chart for one. Bulls will point to the Q4 solid uptrend in favor of our domestic Pizza Hut/KFC, the YUMC bulls will say there is about to be a break BELOW a bull flag in favor of China. If one wanted another example LKNCY has just been in a swift downtrend against SBUX, even with the latter struggling itself. Looking at bright spots one could point to the WEEKLY chart below of TCOM. This Chinese travel platform play could be suggesting a regional recovery. It has gained 30% YTD already and half of that was this week's gain of almost 15%, incredible relative strength after a well-received earnings reaction. Another name to strengthen the China theme could be the behavior in HTHT. It is higher 4 of the last 5 weeks, and even though it is 25% off most recent 52-week highs it has burst off the round 30 number, now approaching 40 and likely to 50 sometime in the first half where it last touched at the start of 2023 as it forms a double bottom pattern.

Recent Examples:

  • Leisure plays within the consumer discretionary space have been holding up well. POOL which we have spoken about seems to be allergic to the very round 400 number, but as long as it remains in the vicinity of the figure the better. On the WEEKLY chart since June 2022, the level has also been a thorn in its side. THO is acting well POST breakout above a 122.10 cup base pivot and that is exactly what you want to see in fledging breakouts. Below is the chart of GRMN and how it appeared in our 1/11 Consumer Note. This week surged 11% after a well-received earnings reaction, its sixth consecutive one, and on its WEEKLY chart broke above a cup with handle pivot of 129.42. To demonstrate its consistency one would have to go back to the September-October 2022 timeframe to witness a 3-week losing streak. Peer TRMB is in gap mode as well with this week rising 2% after the prior week screamed upward by 15%.

Special Situations:

Five Below:

  • Discount retail play down 9% YTD and 6% over last one year period.
  • Name 12% off most recent 52-week highs and last 3 weeks have all CLOSED near highs for the WEEKLY range. WEEKLY chart shows how stubborn the 210 level has been with 4 rejections there since early 2023. Look for move back into level.
  • Earnings reactions mixed up .2 and 7.8% on 11/30 and 6/2/23 and fell 6 and 1.4% on 8/31 and 3/16/23.
  • Enter with decisive buy stop above 50 day SMA.
  • Entry FIVE 195.  Stop 189.

Academy Sports and Outdoors:

  • Recreation play up 7% and 19% over last one year period. Dividend yield of .5%.
  • Name at all-time highs and has advanced 12 of the last 15 weeks. Nice action POST breakout above WEEKLY double bottom with handle pivot of 58.60. The week ending 10/13/23 recorded a doji candle adeptly calling the near-term low.
  • FOUR consecutive positive reactions (13 in total, not a typo) up .6, 9.3, 1.8 and 8.4% on 11/30, 8/31, 6/6 and 3/16/23.
  • Enter after break above bull flag.
  • Entry ASO here.  Stop 68.50.

Victoria's Secret:

  • Specialty retailer up 11% YTD and down 27% over last one year period.
  • Name 27% off most recent 52-week highs and has now doubled in PRICE off the mid-October 2023 lows. Encouraging the most is the very taut trade the last 3 weeks with all CLOSING within just .27 of each other, and we know breakouts from this type of consolidation tend to be powerful.
  • Earnings reactions mixed up 14.3 and 6.9% on 11/30 and 8/31/23 and fell 8.7 and 5.2% on 6/1 and 3/3/23.
  • Enter after recapture of cup base breakout.
  • Entry VSCO here.  Stop 28.

Good luck.

Entry summaries:

Buy stop (decisive) above 50-day SMA FIVE 195.  Stop 189.

Buy after break above bull flag ASO here.  Stop 68.50.

Buy after recapture of cup base breakout VSCO here.  Stop 28.

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AI Footwear Winner?

  • Of course, the above statement is a weak stab at humor, but the chart below shows how closely DECK has been trading to NVDA since the late October lows last year. Each has essentially doubled in PRICE and one should expect these leaders to continue to flex their muscles because we know that stocks once in motion, whether up or down, tend to remain that way, more likely than they are to reverse. In the small footwear niche arena DECK is not surprisingly being held hostage, most likely temporary, to round number theory. A bull flag is now in place and a move above 900 carries a measured move to 1050. CROX is sporting a bull flag formation of its own and a move through 120 could see a target of 145. BIRK is attempting to solidify itself above the very round 50 number and Friday almost precisely retested a double bottom trigger of 50.29 taken out on 2/12 (former resistance at the round 50 figure now looks like support). SHOO is north of its double bottom pivot of 43.68 taken out on 2/15.

China Greenshoots?

  • With the amount of bearish chatter recently about China one must be looking for an opportunity to take the other side, even if one of my mentors always expressed to me consensus is usually right. If one was to take a peek at the casual diners a good temperature gauge may be a peek at the YUM:YUMC ratio chart for one. Bulls will point to the Q4 solid uptrend in favor of our domestic Pizza Hut/KFC, the YUMC bulls will say there is about to be a break BELOW a bull flag in favor of China. If one wanted another example LKNCY has just been in a swift downtrend against SBUX, even with the latter struggling itself. Looking at bright spots one could point to the WEEKLY chart below of TCOM. This Chinese travel platform play could be suggesting a regional recovery. It has gained 30% YTD already and half of that was this week's gain of almost 15%, incredible relative strength after a well-received earnings reaction. Another name to strengthen the China theme could be the behavior in HTHT. It is higher 4 of the last 5 weeks, and even though it is 25% off most recent 52-week highs it has burst off the round 30 number, now approaching 40 and likely to 50 sometime in the first half where it last touched at the start of 2023 as it forms a double bottom pattern.

Recent Examples:

  • Leisure plays within the consumer discretionary space have been holding up well. POOL which we have spoken about seems to be allergic to the very round 400 number, but as long as it remains in the vicinity of the figure the better. On the WEEKLY chart since June 2022, the level has also been a thorn in its side. THO is acting well POST breakout above a 122.10 cup base pivot and that is exactly what you want to see in fledging breakouts. Below is the chart of GRMN and how it appeared in our 1/11 Consumer Note. This week surged 11% after a well-received earnings reaction, its sixth consecutive one, and on its WEEKLY chart broke above a cup with handle pivot of 129.42. To demonstrate its consistency one would have to go back to the September-October 2022 timeframe to witness a 3-week losing streak. Peer TRMB is in gap mode as well with this week rising 2% after the prior week screamed upward by 15%.

Special Situations:

Five Below:

  • Discount retail play down 9% YTD and 6% over last one year period.
  • Name 12% off most recent 52-week highs and last 3 weeks have all CLOSED near highs for the WEEKLY range. WEEKLY chart shows how stubborn the 210 level has been with 4 rejections there since early 2023. Look for move back into level.
  • Earnings reactions mixed up .2 and 7.8% on 11/30 and 6/2/23 and fell 6 and 1.4% on 8/31 and 3/16/23.
  • Enter with decisive buy stop above 50 day SMA.
  • Entry FIVE 195.  Stop 189.

Academy Sports and Outdoors:

  • Recreation play up 7% and 19% over last one year period. Dividend yield of .5%.
  • Name at all-time highs and has advanced 12 of the last 15 weeks. Nice action POST breakout above WEEKLY double bottom with handle pivot of 58.60. The week ending 10/13/23 recorded a doji candle adeptly calling the near-term low.
  • FOUR consecutive positive reactions (13 in total, not a typo) up .6, 9.3, 1.8 and 8.4% on 11/30, 8/31, 6/6 and 3/16/23.
  • Enter after break above bull flag.
  • Entry ASO here.  Stop 68.50.

Victoria's Secret:

  • Specialty retailer up 11% YTD and down 27% over last one year period.
  • Name 27% off most recent 52-week highs and has now doubled in PRICE off the mid-October 2023 lows. Encouraging the most is the very taut trade the last 3 weeks with all CLOSING within just .27 of each other, and we know breakouts from this type of consolidation tend to be powerful.
  • Earnings reactions mixed up 14.3 and 6.9% on 11/30 and 8/31/23 and fell 8.7 and 5.2% on 6/1 and 3/3/23.
  • Enter after recapture of cup base breakout.
  • Entry VSCO here.  Stop 28.

Good luck.

Entry summaries:

Buy stop (decisive) above 50-day SMA FIVE 195.  Stop 189.

Buy after break above bull flag ASO here.  Stop 68.50.

Buy after recapture of cup base breakout VSCO here.  Stop 28.