Look Beyond the PVH Daily Chart

 | Apr 23, 2014 | 9:00 AM EDT  | Comments
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PVH (PVH) is another stock for which I had to back up a bit, and look at the weekly chart, in order to identify a bigger-picture buy setup. If you only look at the daily chart of this apparel company, you'll miss some important technical information that is available on the higher time frame.

Let's start with what I'm seeing on this weekly chart. I like to call this "symmetry" -- similarity or equality when comparing swings in the same direction. In this case, I have measured some of the prior major declines within the weekly uptrend.

PVH -- Daily
Source: Dynamic Trader

I have noted two prior declines above -- which respectively brought the stock lower by $25.37 and $24.71. I projected 100% of both of these pullbacks, and projected them from the high PVH hit in January. Note that, at the recent March low, the decline was a very similar $24.84. This tells me that this potential support level had value, at least on the first test of it. Now if this is a more important low, then the stock should hold on a pullback to that level -- and it also means the potential upside target comes in at the $145 handle.

PVH -- Weekly
Source: Dynamic Trader

That takes me to the daily chart, where we can work on refining a buy entry. On this chart, I have run all possible Fibonacci price relationships since around January. I am finding a very healthy price cluster of support between $118.73 and $120.30. It includes the coincidence of some 100% projections, a couple of extensions of prior swings and some overlapping Fibonacci price retracements.

I will be watching to see if price can continue to hold above this zone. If so, I will take my buy triggers on a 30-minute chart and define my maximum risk below the $118 area. Those who prefer to give it more room might want to place a stop below $114.10 instead. A minor target for a move off this support level comes in around $128. Still, don't forget the potential on the weekly chart at around $145.

Please refer here for more information on trade triggers.

See here for general guidance on Fibonacci trade setups.

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