Avoid the Long Side of Urban Outfitters

 | Mar 19, 2018 | 3:49 PM EDT
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urbn

Urban Outfitters, Inc. (URBN) was reviewed in early March, where I said, "URBN could be under pressure Wednesday. Our indicators have been giving us some warnings in recent weeks so it could mean that the support around $32 is tested and maybe broken. A close below $32 could mean a decline to around $26." The price action and the indicators have not improved so a fresh look is in order.

In this daily bar chart of URBN, below, we can see prices just holding above the flat 50-day moving average line. It will not take much of a decline to close below the average line. The daily On-Balance-Volume (OBV) line is flat and not suggesting that buyers are being more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is pointed down and could break the zero line for an outright sell signal.

In this weekly bar chart of URBN, below, we can see that the 40-week moving average line is still pointed up. The weekly OBV line has weakened and the MACD oscillator is crossing to at take profits sell signal.

In this Point and Figure chart of URBN, below, we can see that a decline to $34.27 will be a short-term new low and could be just enough to weaken the chart further.

Bottom line: The charts of URBN are looking more vulnerable. Reduce your long exposure.

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