During the popular, fast-paced "Lightning Round" segment of Mad Money Tuesday night, one caller asked about The Buckle (BKE) : "I don't like apparel and if I did, I'd want PVH Corp. (PVH) or Ralph Lauren (RL) ," was Jim Cramer's response.
Let's check out the chart of this retailer of medium to better-priced casual apparel, footwear, and accessories.
In this daily bar chart of BKE, below, we can see that prices did not make their low until early April or about two weeks behind the broader market. You want to buy market leaders and not market laggards. Prices have slowly recovered since early April and are trading above the rising 50-day moving average line and above the still declining 200-day moving average line.
The On-Balance-Volume (OBV) line has not been able to break above its June high even though prices have done so - this is a bearish divergence and suggests that a cautionary stance be assumed.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but narrowing.
In this weekly bar chart of BKE, below, we can see the past five years of activity. Prices have been in a downward trend for most of time.
BKE is trading above the declining 40-week moving average line.
The weekly OBV line shows very little sustained strength and the MACD oscillator is only now ready to cross the zero line for an anticipated buy signal.
In this Point and Figure chart of BKE, below, we used daily price data. The chart is projecting a potential upside price target in the $23.50 area. Not much upside if you ask me.
Bottom line strategy: The charts and indicators of BKE are not inspiring and only mildly bullish. Trading volume is not showing an expansion since March, telling me that traders and investors are not being attracted to this name. Avoid.
