The stock of e.l.f.Beauty (ELF) was covered earlier this month, but it was upgraded to HOLD by theStreet.com's quantitative service. On April 2nd I said, "I cannot find any positives on the charts of ELF. A close below $17.75 is likely to open the way to further declines. Remain defensive." While a few more days of trading is often not that significant, a quantitative upgrade should not be ignored.
In this daily bar chart of ELF, below, we can see that prices have not made a new low since early March. The pullback in the second half of March could be considered a "retest" of the low. However you want to view it, we have not closed below our sell signal of $17.75 (see above). The daily On-Balance-Volume (OBV) line has inched up slightly from early March and the Moving Average Convergence Divergence (MACD) oscillator is back to the zero line and moving above the line will be an outright go long signal.
In this weekly bar chart of ELF, below, shows that prices are still below the declining 40-week moving average line but a weekly close above $21 would break it. The weekly OBV line has been neutral the past two months and the MACD oscillator is in a cover shorts mode.
In this Point and Figure chart of ELF, below, we can see an upside price target of $20.72.
Bottom line - an upgrade to HOLD is not the same as a BUY but we can say now that I don't need to be a bear on ELF. Stay tuned.
