Bullish Divergencedon't try to catch a falling knife - that's what the long term chart would suggest.
Short term there might be room for short correction and uptick.
Not sure if the stock will react before the earnings release coming up.
FL trade ideas
Going long FL on WednesdayFL is printing a bullish hammer canldestick price bar near the 11/17 gap-up LOD on above average volume with my momentum/trending oscillators confirming the price move. I am going long FL Wednesday morning using a limit order (GTC-BUY-LMT) @ 40.45. I will have two trailing sell stops (GTC-SELL-STP) @ 38.66 and 38.25 to protect my initial invested capital in case FL does not move higher immediately. I am expecting the stock to move up and through its August and May resistance levels with a new 52-week high being the ultimate goal in the intermediate term.
Foot Locker has 120% upsideFor a four weeks the price of FL is staying without moving. But after investigating the waves, we can observed that there is good time to buy. My estimate is that the price cannot go down under 29.95$ since it is the end of the 1st wave. The first target of the 5th wave is about 80%, it is 120% upside.
FL will it retest MA line first or just go straight downFL is at a interesting point right now where it could go either possibility that I drew out. I think if retailers remain weak, it might just go straight down so I will be trading it as a day trade on the short side until one of the two possibilities confirm.
Foot Locker Incorporated (FL) Always Rises When This HappensFoot Locker Incorporated has been in a bullishtrend since 2008. It has however, been moving downward since its most recent earnings call. On multiple occasions through this trend, three of the technical indicators discussed below are at similar or lower levels, than they are now. These instances have resulted in nice short-term gains for the stock. I have laid out the reasons and levels to which the stock may gain while it most likely continues its long-term trend.
When we look at technical indicators, the relative strength index (RSI) is at 19.7756. RSI tends to determine trends, overbought and oversold levels as well as likelihood of price swings. I personally use anything above 75 as overbought and anything under 25 as oversold. Currently the RSI oversold.
The positive vortex indicator (VI) is at 0.7989 and the negative is at 1.2480. When the positive level is higher than 1 and higher than the negative indicator, the overall price action is moving upward. When the negative level is higher than 1 and higher than the positive indicator, the overall price action is moving downward. The negative value is high, meaning the stock has been moving down, and is continuing to do so. The momentum has begun to slow and the positive value is beginning to move upward. The stock should begin rising soon.
The stochastic oscillator K value is 6.2597 and D value is 5.3371. This is a cyclical oscillator that is highly accurate and can be used to identify overbought/oversold levels as well as pending reversals and short-term activity. I personally use anything above 80 as overbought and below 20 as oversold. When the K value is higher than the D value, the stock is trending up. When the D value is higher that the K value the stock is trending down. The stochastic is very oversold. I cannot sit at this level much longer. Once the D value crosses above the K, the stock should begin to rise.
SPECIFIC ANALYSIS
I have created an algorithm (called the SAG gauge) which signals when stocks are truly overbought and oversold. The algorithm indicates when a particular stock meets multiple criteria which culminates in an oversold or overbought alert. That signal will occur within the next few days. The one more day of gains should create the signal. Because this signal will go off after continued gains, now is the best time to enter a position and take greater advantage of the pending upward movement.
Upon back-testing this indicator, it has signaled oversold status 72 times in the history of the stock. Eighty percent of the time the stock gains at least 2.50% over the following 30 trading days after the indicator date. Seventy percent of the time, the stock gains 5% and fifty percent of the time gains 11%.
In the history of this stock, it always gains a minimum of 3.64% when the negative VI is at or above its current level at the same time the RSI is oversold at or below its current level. This additional study requires the stochastic to be oversold as it is today too. Thirteen similar occurrences were studied. The median gain for the stock is 10.57% and the gain takes a median of eight trading days to occur. Seven of these instances occurred at the same time the SAG gauge determined the stock to be oversold. The minimum gain for these instances is 9.38% and the median gain is 19.70%. All of these statistical gains happen fast so anticipating the stock to go up and up is not recommended. The maximum movement for this stock could occur within the next 15-25 days.
Considering the RSI, VI and stochastic levels, the overall direction favors a move to the upside. Based on historical movement compared to current levels and the SAG gauge, the stock could gain at least 5% over the next 35 trading days if not sooner.
FL - Rising wedge breakdown short from $70.13 to $66FL seems forming a rising wedge formation. Breaking below $70.13 would be wedge break-down confirmation, and if it breaks it can decline to $66.
* Trade Criteria *
Date first found- February 21, 2017
Pattern/Why- Rising wedge
Entry Target Criteria- Break of $70.13
Exit Target Criteria- $66
Stop Loss Criteria- N/A
Please check back for Trade updates. (Note: Trade update is little delayed here.)
