In his first Executive Decision segment of Monday's "Mad Money" program, host Jim Cramer spoke with Elizabeth Spaulding, CEO of Stitch Fix Inc. (SFIX) , the online apparel shopping service.
Spaulding said the mission at Stitch Fix hasn't changed and the company continues to transform the face of fashion retailing, replacing endless searching with data science and human stylists. She noted that online sales for fashion were 25% pre-pandemic and they're now 40% post-pandemic.
Spaulding added that by using the data from its platform, Stitch Fix is able to see changes coming and shift its products to meet demand.
Let's check on the data from the marketplace - the stock market. In our March 8 review we wrote, "Nimble traders should have made nice profits on the way up, but now the charts suggest further risk ahead. Avoid the long side for now."
In this daily bar chart of SFIX, below, we can see that prices remained weak into early May and then staged a rebound rally that largely has fizzled into early August. SFIX is trading below the cresting 50- and 200-day moving average lines. The On-Balance-Volume (OBV) line has been weak since late January and continues lower, telling us that sellers of SFIX have been more aggressive than buyers. The trend-following Moving Average Convergence Divergence (MACD) oscillator has fallen below the zero line for an outright sell signal.
In this weekly Japanese candlestick chart of SFIX, below, we can see that prices are trading below the cresting 40-week moving average line. There are two lower shadows below $40 in May but that might not provide enough support to stop further declines. The weekly OBV line is pointed downward, telling us that sellers are more aggressive, while the MACD oscillator has crossed below the zero line for an outright sell signal.
In this daily Point and Figure chart of SFIX, below, we can see that prices have reached a downside price target. However, we are not seeing any signs of new accumulation (buying).
In this weekly Point and Figure chart of SFIX, below, we can see a potential downside price target in the $38 area. This suggests we will see a retest of the May low.
Bottom line strategy: SFIX may be doing well from a fundamental perspective but traders and investors are focused on something else and prices are likely to trade lower this summer. Avoid the long side.