In his first "Executive Decision" segment during Wednesday night's Mad Money program, Jim Cramer spoke with Chip Bergh, president and CEO of Levi Strauss (LEVI) , the iconic apparel maker that just posted a surprise earnings beat when analysts were expecting a loss. Shares of LEVI surged 5% by the close Wednesday.
Bergh said that while overall revenues have been lower during the pandemic, there are still areas of growth. He said the trend of "casualization" continues as more people work outside of the office and denim is still a bigger category than athleisure.
Online sales are booming, up over 50%, as are new options like buying online and shipping from stores or utilizing curbside pickup options.
Levi is also supporting the secondhand denim market, buying back used products and reselling them.
Let's check on the new and gently used charts of LEVI. We looked at LEVI on Monday ahead of earnings here and recommended, "Traders could approach the long side of LEVI ahead of earnings, risking a close below $12 for now. Look for a test of the early June high around $17." Prices almost touched $17 when they gapped higher.
In the daily bar chart of LEVI, below, we can see that prices are up sharply the past few days. A correction of these gains is likely but it could be a sideways affair instead of a pullback/decline. The slope of the 50-day moving average line is bullish but the 200-day line is still negative.
The On-Balance-Volume (OBV) line has been improving since August and trading volume has been very heavy recently. I look for the bulk of these new longs to stay put instead of quickly leaving. The Moving Average Convergence Divergence (MACD) oscillator is bullish.