Discount retailer Five Below, Inc. (FIVE) is scheduled to report their latest quarterly figures to shareholders Wednesday evening.
Let's review the charts ahead of the numbers.
In the daily bar chart of FIVE, below, I can see that the shares are testing the rising 50-day moving average line. FIVE is well above the rising 200-day moving average line so that longer-term signal is safe for now.
The trading volume is neutral but the On-Balance-Volume (OBV) line shows a rise from July to the middle of February. The weakness in the OBV line from mid-February suggests that traders are shifting from aggressive buying to aggressive selling.
The trend-following Moving Average Convergence Divergence (MACD) oscillator is pointed down and just slightly above the zero line and a potential sell signal.
In the weekly Japanese candlestick chart of FIVE, below, I see a stock that could be making a second top pattern. Prices have rallied back to around the highs of 2021. FIVE looks like it made a top reversal pattern in February -- two doji patterns are followed by a large red (bearish) candle. The slope of the 40-week candle is still bullish but this is a lagging indicator.
The OBV line shows weakness from early February. The MACD oscillator has weakened and is close to a downside crossover and potential take profit sell signal.
In this daily Point and Figure chart of FIVE, below, I can see a potential downside price target in the $181 area.
In this weekly Point and Figure chart of FIVE, below, the software projects a price target in the $165 area.
Bottom-line strategy: I have no special knowledge of what FIVE could tell shareholders Wednesday evening, but with the charts looking weak and poised to break below at least one key moving average line, things are pointing to a pullback or decline. Avoid the long side for now.
