Under Armour Inc. (UA) looked weak at the end of May when we last commented on the charts and indicators. As we said at the time: "Without any technical clues that UA could be bottoming, we look for further price weakness in the weeks ahead." Here we are in the middle of September and the charts have not improved and prices are lower.
In this daily bar chart of UA, above, we can see how prices recently failed at the underside of the declining 50-day moving average line. The 200-day moving average has been negative as soon as we had enough data to calculate it. The On-Balance-Volume (OBV) line has been in a downtrend the past 12 months and tells us that sellers of UA have been more aggressive for months.
In the lower panel is the 12-day momentum study, which is showing a small bullish divergence since early August. Prices have made lower lows since August but momentum has made a higher low, diverging from the price action. The longer a divergence goes on the more important it becomes, so a one-month divergence is not particularly significant.
In this weekly chart of UA, above, we have mixed signals. Prices are in a downtrend and below the declining 40-week moving average line. The weekly OBV line weakened from April to late July but has moved sideways since early August even as prices have declined. In the bottom panel the 12-week momentum study shows a large bullish divergence from February to August as prices made lower lows but momentum made a higher low.
In this limited Point and Figure chart of UA, above, we can see a downtrend and a bearish price target of $9. The price target may be open to debate, but the $17.50 to $21 area on this chart now represents resistance.
Bottom line: The downtrend in UA seems to be dominating the price action. A bottom, should it develop, will take time and months of sideways price action.