EarningsBeats.com Digest for June 26, 2020
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Time To Do A Little Clothes Shopping?
Retail apparel stocks ($DJUSRA) have fallen 6 of the past 7 trading sessions. This is a group that was beaten up badly during the worst of the pandemic in March and April. Many of those same groups have really struggled the past 1-2 weeks and the DJUSRA has been no exception. However, the group is now testing both trendline and price support. My belief is that we remain in a secular bull market. As such, I'd look for even the
weakest groups to hang onto support. If the group doesn't rebound from this level, it could have much further to drop before finding its next area of key support. So what apparel retail stock might be considered? One stock that's becoming interesting is Duluth Holdings, Inc. (DLTH):
DLTH is the only apparel retailer that we currently have on our Strong Earnings ChartList and you can see the huge move after earnings earlier in June. After briefly touching $10 per share, DLTH has fallen back to test its rising 20 day EMA. While this doesn't guarantee us a bounce, it does offer up a solid reward to risk entry. If you're a fairly aggressive trader, you might consider using gap support of 6.53 as a closing stop, while
perhaps looking for a bounce all the way back to 9.50-10.00 to print the right side of a cup.
Happy trading!
Tom Bowley
Chief Market Strategist
EarningsBeats.com
Better Timing. Better Trades.
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