In one of his "Executive Decision" segments on "Mad Money" Monday, our own Jim Cramer checked back in with Tim Boyle, president and CEO of Columbia Sportswear (COLM) The apparel maker had the misfortune of reporting earnings in the middle of last week's relentless selloff. Boyle started off by saying that Columbia takes its obligations to its shareholders seriously, and has a solid management team and board of directors capable of guiding the company through any environment.
In the summer of 2017, Columbia stared a new initiate called Connect that aims to streamline the company's global operations for optimal efficiency. Boyle said the returns from those initiatives are just starting and will be fully realized in 2019 and beyond. When asked about the effects of tariffs on Columbia's business, Boyle said tariffs have the potential to do significant damage to the U.S. economy. Only 30% of Columbia's sales are outside the U.S., but its products are sourced globally. That's a quick summary of some of the fundamentals, but what do the charts look like today? It has been a year since we last tried the company on for size.
In this daily bar chart of COLM, below, we can see that prices did rally nicely after our update one year ago. Since June the price of COLM has been trading sideways in a consolidation phase. Prices have crossed above and below the largely flat 50-day moving average line. In the past two weeks COLM has been testing the rising 200-day moving average line.
The daily On-Balance-Volume (OBV) line shows a bullish rise from last November to June and then a neutral trend. A move higher for the OBV line would be a good thing right now to confirm a move above $95. The daily Moving Average Convergence Divergence (MACD) oscillator is crossing to the upside now from below the zero line. This is a cover-shorts buy signal. Crossing the zero line would be an outright go-long signal.
In this weekly bar chart of COLM, below, we can see that prices have been testing the rising 40-week moving average line. The weekly OBV line was strong in 2017 and 2018 until September. It would be a positive signal if the OBV line resumed its rise from here. The weekly MACD oscillator has been in a take-profits mode from July, but recently the two averages that make up this indicator have begun to narrow. A cross to the upside would be bullish.
In this Point and Figure chart of COLM, below, we can see an upside price target of $102.93.
Bottom line strategy: Risking below $85, traders and investors could go long COLM. Look for gains to the $100-$103 area and then $110.