Five Below, Inc. (FIVE) has corrected lower the past 3-1/2 months and has been testing the rising 200-day moving average line this month. FIVE is higher in early Tuesday trading so it may be able to start a rebound or recovery rally. Let's check the charts and indicators.
In the daily bar chart of Action Alerts PLUS holding FIVE, below, we can an exhaustion gap in early September as FIVE gapped higher but soon started a decline. Prices closed below the 50-day average line in October and the slope of this indicator turned negative in November. Prices finally reached the 200-day average line this month.
The daily On-Balance-Volume (OBV) line topped out in September and turned lower in November. The trend-following Moving Average Convergence Divergence (MACD) oscillator is below the zero line but the two moving averages that make up this indicator are ready to cross to the upside for a cover shorts buy signal.
In the weekly bar chart, below, we can see that the share price of FIVE has had a nice run the past three years. Prices are testing the rising 40-week moving average line.
The weekly OBV line shows only some modest weakness the past three to four months. The 12-week price momentum study shows a slight rise the past three weeks. This not a significant divergence but it is a start.
In this Point and Figure chart of FIVE, below, we can see a bearish price target of $80.03 being projected but we can see that holding $95.50 will be important. A rally to $105.49 will be a positive.
Bottom-line strategy: It looks like the broader market will try the upside Tuesday and that may be just enough to get FIVE to rally above its mid-December highs around $105-$106. If this happens FIVE may have started a tradable rally.
