e.l.f. Beauty, Inc. (ELF) has improved technically since our last review in October where we observed that, "ELF is showing some small positive signs. Prices may be done going down, and we could see a near-term recovery to $25 or so." ELF only rallied toward $24 but the technical picture has continued to strengthen the past two months.
In this updated daily bar chart of ELF, below, we can see that prices are testing the rising 50-day moving average line from above the line. ELF is still below the declining 200-day line as it was in October but the intersection of this longer-term indicator is a must closer. A close above $24 would be a new high close on the chart and break the 200-day line.
The On-Balance-Volume (OBV) line declined from May to November but it has improved since. A rising OBV line tells us that buyers of ELF have become more aggressive. Another technical improvement since October is a bullish divergence. ELF made a slight new low in November but the 12-day momentum study made a higher low compared to early September. This momentum difference tells us that momentum slowed and that was probably due to investors buying on the decline.
In this short weekly bar chart of ELF, below, we can see that prices are below the declining 40-week moving average line, but a weekly close above $23 would break the decline. The weekly OBV line shows a slightly higher low in December than in early November and this could be an early sign of a shift to more aggressive buying. The weekly Moving Average Convergence Divergence (MACD) oscillator shows a cover shorts buy signal in mid-November.
In this Point and Figure chart of ELF, below, we can see a potential base pattern but a rally to $23.02 or better above $23.25 would improve the picture.
Bottom line: The prospects for ELF have improved but I would still like to buy strength. Traders could go long ELF on a close above $24 risking a close below $21 looking for gains to the $29-$30 area.