In Friday's "Mad Money" program on CNBC, our own Jim Cramer looked ahead to key earnings reports. Today investors will be watching as L Brands (LB) , Urban Outfitters (URBN) and Intuit (INTU) all report quarterly results.
Cramer wondered if the retail stocks have gotten hit a little too hard, particularly L Brands. Let's take a look at the charts.
In this daily bar chart of LB, below, we can see how the price of LB has improved from early September. LB rallied above the 50-day average line in October and above the 200-day line in November. The slope of the 50-day line is bullish but the 200-day line is still bearish.
The daily On-Balance-Volume (OBV) line turned up from early September but has begun to weaken this month.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is poised to cross to the downside for a take profits sell signal.
In this weekly bar chart of LB, below, we can see a long decline in the share price of LB over the past three years. Prices have spent much of the time below the 40-week line but we can see that recently we have closed above this long-term indicator.
The weekly OBV line shows a two month rally phase. This may prove to be a temporary rebound as it did in August 2017.
The weekly Moving Average Convergence Divergence (MACD) oscillator turned up for a cover shorts buy signal in September but this indicator is a long way from an outright go long signal.
In this Point and Figure chart of LB, below, we can see an upside price target of $54.98 being projected.
Bottom line strategy: The charts and indicators for LB have been improving in recent months but I do not think that LB is ready yet for a sustained price recovery so I would look for further sideways price action in the weeks and months ahead.