Consumers Digest:

I remember my Dad always telling me many years ago Consumers Digest was the most honest publication around. Well in the stock market, technicians always declare truth in PRICE. And market participants are attempting their best to digest some big moves in the consumer space. Lately we had a couple of major moves within the space as GPS announced it would be spinning off Old Navy. That produced a 16.2% jump last Friday, but by the end of the session it CLOSED 6% off intraday highs. On the flip side KHC FELL 27% on 2/22 after an ill received earnings report. The stock was in a downtrend for a couple years, and is now more than 50% off its most recent 52 week highs. Major indigestion.

Santa’s Helper Ailing:

The post Christmas blues can be a tough time for some, for others traumatic. Of course this is a stab at humor, but long shareholders of ELF have felt pain almost non stop since mid ’17. Perhaps there is only room for one name in the space, as ULTA is just 4% off most recent 52 week highs (SBH is down a quarter of its value from its own most recent highs). ELF is 61% off its own yearly peak, and it’s unlikely that even Rudolph with his red Ulta Beauty covered nose can help.

Examples:

Trends we often like to mention remain in place more likely than they are to reverse. That goes for winners, and losers. Strength should be bought and weakness sold. Below is the chart of a good example PLCE, and how it appeared in our 2/27 Consumer Report. Monday it cratered more than 10% on a FIFTH consecutive negative earnings reaction, and is now nearly chopped in half since the bearish engulfing candle last Halloween. The chart action is no child’s play, pun intended.

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