Loop Capital downgraded shares of Crocs (CROX) to "hold" from "buy". The stock made a high back in November around $180/share and tumbled to the $70 area by March. Let's check on the charts and indicators.
In this daily bar chart of CROX, below, we can see that prices have been under selling pressure the past four months. Trading volume has been more active the past three months but has not reached what I would consider to be "throw in the towel" volume or enough to suggest a change of ownership from weak hands to strong hands. CROX is trading below the declining 50-day moving average line as well as the bearish 200-day moving average line.
The On-Balance-Volume (OBV) line rolled over in November and showed a little positive movement in March but nothing to really move the needle.
The Moving Average Convergence Divergence (MACD) oscillator shows some improvement from late January but remains below the zero line and is poised to cross to the downside.
In this weekly Japanese candlestick chart of CROX, below, we fail to see a bottom reversal pattern. Prices are below the declining 40-week moving average line. The weekly OBV line is pointed lower as traders remain more aggressive sellers. The MACD oscillator is in a bearish alignment below the zero line and weeks away from a potential cover shorts buy signal.
In this daily Point and Figure chart of CROX, below, we can see a potential downside price target in the $64 area.
In this weekly Point and Figure chart of CROX, below, we see a lower price target in the $49 area.
Bottom line strategy: The fundamental downgrade of CROX underscores the weakness I see in the charts. Avoid the long side of CROX as further declines are likely in the weeks and months ahead.
