In his first Executive Decision segment of last Friday's "Mad Money" program, host Jim Cramer spoke with Jim Conroy, president and CEO of Boot Barn Holdings (BOOT) , a Western apparel retailer.
Conroy said while Boot Barn's first customers were actual cowboys working on farms and ranches, its market has expanded greatly into the casual country and Western consumer. These new consumers still wear jeans and boots, he said, but typically prefer baseball caps over cowboy hats.
This new group of consumers has emboldened the company's growth plans, Conroy added. Boot Barn had initially targeted 500 stores, but with the growth it has seen in new markets it now believes it can exceed those initial plans. Conroy said the company's online sales also continue to grow, with nearly 25% of those sales shipped to stores for pickup.
Let's check out BOOT's charts.
In this daily bar chart of BOOT, below, we can see a pretty amazing straight-line advance the past 12 months. If anyone tells you that prices do not trend, please show them this chart. BOOT is trading above the rising 50-day and 200-day moving average lines. The daily On-Balance-Volume (OBV) line shows a smooth and bullish rise the past year to confirm and support the price gains. The Moving Average Convergence Divergence (MACD) oscillator made a strong move up in November but has crossed to the downside for a take profit sell signal.
In this weekly Japanese candlestick chart of BOOT, below, we can see some clues not visible on the bar chart. Notice the two upper shadows in November as traders rejected the highs? This is a clue that prices may need to make a correction or pause. The 40-week moving average line is still bullish. The weekly OBV line is showing some weakness in November. The MACD oscillator is pointed up but has just begun to narrow.
In this daily Point and Figure chart of BOOT, below, we can see a potential downside price target in the $112 area.
In this weekly Point and Figure chart of BOOT, below, we can see that prices reached a price target.
Bottom line strategy: Prices have made a tremendous rally from the early 2020 lows. Upper shadows can be seen on the weekly candle bars. These are two good reasons to take profits on shares of BOOT. They will fit better after a good correction. This correction will be both in price and in time.