In the Lightning Round of Mad Money this Wednesday night Jim Cramer told one caller asking about Canada Goose Holdings, Inc. (GOOS) "They are doing a remarkable job. I remain a buyer." We may have an early spring but let's take a look at the charts and indicators or GOOS.
In this daily bar chart of GOOS, below, we can see a "broadening-like pattern" from June. GOOS makes higher highs and lower lows from June to late December. Broadening patterns can be continuation patterns if they breakout to new highs and continue the uptrend but they can become reversal patterns and mark a top reversal. The bullish broadening pattern and bearish broadening pattern look the same so it is hard to handicap. Traders can get whipped back and forth as prices oscillator in wider and wider swings. Right now GOOS is above the declining 50-day moving average line and above the rising 200-day average line. The 50-day line just crossed below the 200-day line for what is commonly called a death cross. The volume pattern is unremarkable but it looks like the turnover has increased since the middle of November. The daily On-Balance-Volume (OBV) has been moving sideways from June and is not giving us and strong signals about investors. The Moving Average Convergence Divergence (MACD) oscillator crossed to the upside in early January for a cover shorts signal and it is just now crossing the zero line for an outright go long message.
In this weekly chart of GOOS, below, we can see some near-term improvement in the technical studies. Prices are back above the rising 40-week moving average line. The weekly OBV line has moved up the past four to five weeks and the MACD oscillator is close to a buy signal on this longer time frame.
In this Point and Figure chart of GOOS, below, we can see an upside price target of $69.80 being projected. This is a good rally from current levels but not new highs.
Bottom line strategy: I usually do not shy away from a recommendation because you can't make money by being out of the market - but broadening patterns are difficult at best. Let's check back in a few weeks.