During his first Executive Decision segment of "Mad Money" Monday, host Jim Cramer spoke with Jim Conway, president and CEO of Boot Barn Holdings Inc. (BOOT) , a western-themed apparel retailer that just saw same-store sales surge an incredible 20%. Shares of Boot Barn rallied 2.5% by the close Monday to new all-time highs.
Conway said a number of factors are contributing to Boot Barn's popularity. He said the underlying business remains strong and many of the retailer's internal initiatives are beginning to bear fruit.
When asked about competition from smaller retailers, Conway said Boot Barn had been taking market share from smaller vendors for years and that trend was only accelerated by the pandemic. Conway said there's a lot to look forward to once the pandemic begins to fade, as the supply of inventory will be better and consumers will have rodeos and concerts to attend, which means they'll want new boots and apparel.
We reviewed the charts and indicators of BOOT just last week, when the company got a quantitative upgrade to Buy from TheStreet Quant Ratings service. We wrote, "The charts and indicators of BOOT pointed up but extended (overbought), so traders should wait for a pullback before approaching the long side."
Let's check and see if that strategy needs any adjustment.
In this updated daily bar chart of BOOT, below, we can see a bullish picture. Prices are in an uptrend at new highs. The slope of both the 50-day and 200-day moving averages are positive but we should not ignore that BOOT is trading at twice the level of the 200-day line. The On-Balance-Volume (OBV) line is pointed up and so is the Moving Average Convergence Divergence (MACD) oscillator.
In this weekly bar chart of BOOT, below, we can see a bullish but extended picture. Prices are in an uptrend and firmly above the rising 40-week moving average. The weekly OBV line and the MACD oscillator are going in the right direction -- up.
In this daily Point and Figure chart of BOOT, below, we used close-only prices and here the software yielded a potential price target of $87. The weekly Point and Figure chart we ran last week had a longer-term target of $133.
Bottom line strategy: Yes, prices have made new highs for the move up and the indicators are bullish, but with prices extended/overbought when compared to the longer-term moving averages I hesitate to go long at the market. Wait for a correction.
