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  1. Home
  2. / Investing

L Brands Has Improved but a Sustained Price Recovery Doesn't Look Imminent

Let's take a look at the charts.
By BRUCE KAMICH
Nov 19, 2018 | 12:21 PM EST
Stocks quotes in this article: LB, URBN, INTU

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.

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TAGS: Investing | Technical Analysis | Jim Cramer | Mad Money

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