I figure since we did two bullish charts yesterday, we should visit two daily bear charts today.
Polo Ralph Lauren (RL) tops the list, only because it triggered a price breakdown from a bearish flag yesterday.
It wasn't a long flag, but that doesn't matter. What matters is the long drop before the flag.
Yesterday's breakdown should set us up for a minimum target of $113.00, but I'm looking for the $107.50-110.00 area to be tested.
RL bulls desperately need a close over the 10-day simple moving average (SMA). It has had one since America celebrated its independence.
Every technical measure, from price to momentum to trend to volume to moving averages, is ringing up bearish.
The only good news is the stock is grossly oversold from a daily chart perspective -- but that has helped little on any bounces.
Until we see a close above the 10-day SMA plus a crossover in the moving average convergence divergence (MACD) or perhaps the Relative Strength Index (RSI) moves over 30, there is simply no technical reason to be long.
Shutterfly (SFLY) hasn't seen quite the same price breakdown as RL, but has still broken down. Price did break down from a big flag, the result of the bounce which began at the start of August.
Now we are testing the $40 level yet again. If SFLY closes below $40, then I am looking for a minimum test of $37, with $34 very possible.
Again, all the technical metrics are bearish with many oversold. Is a bounce possible? Absolutely, but unless we clear $42, it likely won't change the bearish setup and target of at least $37 on the downside.
It's been another roller coaster week thus far. Any huge bounce in the market will help even beaten names like these, but I would anticipate underperformance going forward based on the current metrics.