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Downside momentum appears to be easing.

Back on November 4th shares of UAA were hit hard following a disappointing Q3 earnings report: The stock began the session with a huge downside gap before finishing the day with a 19% loss. UAA has drifted lower since but volume has eased dramatically. The post earnings low set on Nov. 4th is still intact.

The top band of a major support zone is holding the last two weekly lows. This key area is marked by the January 2019 low($17.10) and the 2018 Christmas week lows($16.50). If shares can stabilize here a low risk entry opportunity will develop. The action since earnings has been encouraging so far as a divergent low in the daily MACD is in place.

Of note, UAA’s short interest ratio has eased of late but still remains relatively high(7.7).

At time of publication we do not have a position in UAA.