We last covered e.l.f. Beauty Inc. (ELF) in early August, and we anticipated further weakness: "Look for continued price weakness in ELF, with $27 probably capping the upside and maybe $20 on the downside." With hindsight, we can see that the actual range was a dollar lower, or $26 on the upside and $19 on the downside. Has ELF reached a price level where buyers are interested?
Let's check the updated charts and indicators to see what they are saying.
In this daily bar chart of ELF, above, we can see the pattern of lower lows and lower highs going back to December. Prices bounced from late September and have yet to make a lower low to continue the decline. We will not know if a new uptrend is established until prices make a higher high or trade up past $22.50.
Prices are testing the declining 50-day moving average line, but so far this month they have not closed above this line. The slope of the 200-day moving average line is also bearish. The On-Balance-Volume (OBV) line has been in a tailspin since May and tells us that sellers of ELF have been more aggressive.
The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed to the upside in early September for a cover shorts buy signal and is trying to move above the zero line for an outright buy signal.
We do not have a lot of price history to work with in this weekly bar chart of ELF, above. Prices are below the declining 40-week moving average line. The weekly OBV line peaked in June and the weekly MACD oscillator could signal a cover shorts buy in the weeks ahead.
In this Point and Figure chart of ELF, above, we can see the downtrend. A rally to $23.10 is needed to give us a small breakout to the upside.
Bottom line: ELF is showing some small positive signs. Prices may be done going down, and we could see a near-term recovery to $25 or so.