The daily bar chart of Foot Locker (FL) shows a number of price gaps - both bullish and bearish and less than stellar technical indicators. I would anticipate that FL struggles to make much upside progress from here. Let's check out the charts so I can show you want I mean.
In this daily bar chart of FL, below, we can see that prices have worked lower the past four months. Prices have crossed the popular moving averages a number of times but current are above the declining 50-day line and above the flat 200-day line. The daily On-Balance-Volume has been weakening from early June and suggests there has been a fair amount of liquidation and selling. The Moving Average Convergence Divergence (MACD) oscillator has been below the zero line (negative) since late July and has only signaled a cover shorts buy and not an outright buy signal.
In this weekly bar chart of FL, below, we can see that prices are just slight above the now flattening 40-week moving average line. The weekly OBV line is bearish and the MACD oscillator on this time frame is close to the zero line for a possible sell.
In this Point and Figure chart of FL, below, we have no gaps, no volume, time is ignored and we have not overlaid any indicators. Interesting that the chart projects a downside price target of $38.
Bottom line strategy: The risk on the chart is that FL closes below $46 as this is likely to precipitate further declines.
