Columbia Sportswear (COLM) has been under selling pressure the past two months. Like sticking to the Atkins diet, the pounds and the stock price have melted away. COLM is down near its May low and a break of this support could mean more belt-tightening and a smaller size for the shares.
Let's look closer.
In this 12-month daily bar chart of COLM, below, we can see that for most of the past year the share price of COLM has stayed between $64 and $52. Declines into the $54-$52 area found buying support in May and August and September but the volume has been heavier in the latest decline below $54. Prices are below the declining 50-day and 200-day moving averages.
The On-Balance-Volume (OBV) has been declining since early December and tells us that sellers of COLM have become more aggressive. In the lower panel is the 12-day momentum study which shows higher lows since late December even as prices made lower lows. The bullish divergence might give a lift to prices, but I am not that confident it will happen.
In this weekly chart we can see that prices are below the declining 40-week moving average line. The weekly OBV line has been declining since April of last year and is close to breaking the 2016 low. The Moving Average Convergence Divergence (MACD) is now below the zero line for an outright sell signal.
Bottom line: COLM could hold and bounce, but I would not put a lot of confidence behind that trade. I would be prepared for a deeper selloff on COLM with the risk of testing the $50-$45 area.