For his first Executive Decision segment of "Mad Money" on Monday, host Jim Cramer spoke with Chip Bergh, CEO of Levi Strauss & Co. (LEVI) , the apparel maker.
Bergh said that during times such as these, brands matter, and that Levi Strauss continues to cut costs and currently has $1.8 billion in liquidity to help it weather the coronavirus storm.
Bergh noted that Levi Strauss continues to diversify. U.S. wholesale sales used to account for 50% of Levi's total sales, he said, but today they account for less than 30% as online and international growth outpaces traditional brick-and-mortar retail.
Let's see if anything has changed with the charts since our last review on April 6 before the company's earnings report the next day. We stated at that time, "The charts and indicators of LEVI suggest we are a long way from a good-fitting bottom formation. Avoid for now."
In this daily bar chart of LEVI, below, we can see the most recent price action. Prices made a lower low in early April and bounced but have been unable to best the late March highs to change the trend from down. The slopes of both the 50-day moving average line and the 200-day moving average line are still negative. The daily On-Balance-Volume (OBV) line shows only a minor uptick and the Moving Average Convergence Divergence (MACD) oscillator is still in sell territory.
In this weekly bar chart of LEVI, below, we can see some minor narrowing of the MACD oscillator, but overall the chart and indicators of LEVI need more basing action.
In this daily Point and Figure chart of LEVI, below, an upside price target of $24 is projected, but the risk/reward parameters are not attractive for purchase at this time.
Bottom line strategy: While the fundamental story of LEVI may be improving, I don't have enough confidence in the limited chart history to recommend a long position. Continue to avoid for now.