Retailer and distributor of outdoor products, Yeti Holdings (YETI) has been outlining a potential bottom formation. Let's check out the charts and indicators.
In this daily bar chart of YETI, below, I see an inverse-head-and-shoulders pattern being outlined. A left shoulder is visible in May (I have an active imagination). A head is made in late September and a right shoulder in late December. A downward sloping neckline can be drawn across the highs of August and December. A strong close above this neckline with a big increase in volume would be a very positive development to watch for.
The trading volume does not look like it has increased from the September head but the On-Balance-Volume (OBV) line has been moving up from September telling me that buyers of YETI are being more aggressive than sellers.
The Moving Average Convergence Divergence (MACD) oscillator has turned upwards from just above the zero line for a new outright buy signal.
In this weekly Japanese candlestick chart of YETI, below, I see a mixed picture. Prices made a reversal in October. YETI is trading above the 40-week moving average line but its slope has not turned positive. The weekly trading volume has declined since October and that is not what chart watchers want to see.
The weekly OBV line made a low in September but has not improved all that much. The MACD oscillator has been improving for months but has still not crossed above the zero line.
In this daily Point and Figure chart of YETI, below, I can see that the software is projecting a downside price target in the $32 area. A trade at $49 made be needed to refresh the uptrend.
In this second Point and Figure chart of YETI, below, I used weekly price data. Here the software shows us a $33 price target.
Bottom line strategy: Call me fussy. I like to see a classic-looking base pattern with trading volume confirming the price movement. YETI has a right looking price chart but the trading volume is not yet in gear. Keep your powder dry for now.
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