Adidas AG shares lost traction in German trading here on Friday after the maker of athletic footwear and apparel said full-year sales in 2023 would likely decline sharply from 2022 levels. Adidas' new CEO cited as a reason the end of the company's previous partnership with the controversial Kanye West, which could cost Adidas around €1.2. billion in full-year sales.
Let's check a few charts to see what may be ahead for Adidas shares.
In this daily bar chart of ADS, below, I can see the trading on the Deutsche Börse stock exchange in Frankfurt, where Adidas trades under the ticker symbol ADS. Prices suffered a long decline into October/November. Prices made a recovery rally into early February on declining trading volume. Often in my Real Money articles, I will point out rallies on diminishing volume as "vulnerable," and here is another example. ADS briefly moved above the declining 200-day moving average line and is now back below and in position to break below the 50-day line, too. The On-Balance-Volume (OBV) line made a slow advance the past three months and looks like it will turn lower again. The Moving Average Convergence Divergence (MACD) oscillator has crossed lower for a take profit sell signal.
Traders may not be comfortable dealing with stocks on an overseas market. I get that. Below I show the price action for Adidas on our pink sheets under the ticker symbol ( ADDYY) . This venue is also difficult to operate on and again I do not recommend it. In this daily close-only line chart of ADDYY, below, I see similar price movements as the chart above.
In this weekly Japanese candlestick chart of ADDYY, below, I see a weak picture. Prices are set to close back below the declining 40-week moving average line. The rally was weak as trading volume did not expand in the direction of the trend. The MACD oscillator has not crossed above the zero line.
In this daily Point and Figure chart of ADDYY, below, I see a potential downside price target in the $62 area. A decline to $62 could precipitate further losses.
Bottom line strategy: I have no recommendation for shares of Adidas except to avoid them whether listed in Frankfurt or in the States.
