During the fast-paced "Lightning Round" of Jim Cramer's Mad Money program coming from San Francisco Tuesday night Cramer had this to say about Under Armour Inc. (UAA) : "I'm sticking with it. I think it's moving forward." Let's "try on" the charts to see if the price action and indicators look positive going forward.
In the daily bar chart of UAA, below, we can see two trends. There is an uptrend from February to early June and then a broad sideways trend between $25 and $16 or so. During the sideways trend the daily On-Balance-Volume (OBV) line continued to move up, telling me that buyers of UAA were more aggressive. The OBV line does decline in December with prices breaking below our two favorite moving averages. Prices slumped to break the October lows but have recently rebounded.
The key question is whether the weakness in late December was stock specific or driven more from broad market weakness? If UAA is acting weaker than the market I would be worried and would be on guard for a downside reversal. If UAA can continue higher and close above $21 in the weeks ahead, I will be more constructive.
In the weekly chart, below, we can see that UAA declined for about two years before the rally and sideways trend noted above. Prices are back below the rising 40-week moving average line and a weekly close above $20 or so will improve the picture.
The weekly OBV line shows a decline from June which is a different view from the daily OBV line. The weekly OBV line is narrowing towards a bullish crossover right on the zero line.
In this Point and Figure chart, below, we can see that UAA is pointed up and there is now nearby chart resistance to speak of. There is a $19.33 price target but I believe prices have room to move higher.
Bottom-line strategy: It looks like UAA can move higher from here. Two key events need to happen -- UAA cannot break below the December low and UAA needs to close above $21 or above the 50-day and 200-day moving averages. Fingers crossed.