Limited Brands (LB) Stock Chart Analysis

While clothing retailers are not necessarily my first choice when it comes to potential long-term investments, I did receive a request from a Trendy Stock Charts member to analyze the charts for Limited Brands (LB).

Just because I have a dislike for a sector does not mean that it can’t possibly make money. I mean what the heck, do I really mind researching the companies that fall under the Limited Brands umbrella? Not really. Ok, so maybe I am talking about researching the “visual” aspects of some of the companies.

Limited Brands (LB) includes companies such as:

• • • Victoria’s Secret
    • Bath & Body Works
    • Pink
    • La Senza
    • Henri Bendel

If you want to learn more about Limited Brands (LB) & its portfolio of companies, you can visit their official website here.

To the right is Kate Upton, a Victoria’s Secret model, showing off her personal pajama line for the company. There were plenty of nice Victoria Secret pictures to choose from but since is a stock website I figured it was better to keep it as G-rated as possible.

After you’re done checking out the Limited Brands (LB) website, grab a few charts and head into the fitting room. Let’s see if LB can offer a comfortable fit for your portfolio.

LB – 10 Year Monthly Chart

The first Limited Brands (LB) stock chart is a 10 year monthly candlestick chart. I like to start my analysis of a new company by looking at a long-term chart.

LB’s share price developed a nice bullish reversal candlestick pattern, a Piercing candlestick pattern, in April 2017. That bullish reversal candlestick pattern developed on buying volume that was just slightly less than the previous month’s total volume. I typically like when the buying volume from the bullish candlestick pattern is greater than the previous months volume.

I placed the black Fibonacci Retracement Tool and the blue Fibonacci Extension Tool on the chart to help calculate some pullback areas. LB’s share price fell just shy of the black 61.8% Retracement Line and also fell just shy of reaching the blue 100% Target Line.

One last item of concern is that the second selling wave had increased selling momentum as compared to the first wave down.

All these “just misses” seem to indicate that there could be one last push down. Currently, LB’s share price has developed a Zig-Zag wave pattern. This wave pattern is a corrective wave pattern. However, if[s2If !current_user_can(access_s2member_level1)]……

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If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)] LB’s share price does make one more 52 week low after its next earnings report, the Zig-Zag wave pattern will morph into a Bearish Impulse wave pattern.

If the morph does happen, wave 5 of the Bearish Impulse wave pattern should find ample support around the $40 – $43 price level. Let’s review some shorter-term charts and look at the $40-$43 support area in more detail.

LB – 2 Year Weekly Chart

This next chart is a 2 year weekly chart to analyze the downtrend for LB’s share price in a little more detail. LB’s share price does appear to have formed a nice Zig-Zag wave pattern which terminated with a Long-Legged Doji candlestick pattern. A Long-Legged Doji candlestick pattern is a potential bullish reversal candlestick pattern. There was nice buying volume for the Long-Legged Doji as well.

Since Elliott Waves are “adaptable” creatures, there is a chance that LB’s share price could make one more “lower low” if it has a bad upcoming earnings report. The Zig-Zag wave pattern illustrated above would then morph into a Bearish Impulse Wave Pattern.

Since the MACD Histogram reflects buying momentum that is still increasing, LB’s share price has the potential to reach for the $57 price area during the current uptrend. However, any resistance at that level should be considered a selling opportunity as the final leg down could then be starting. At a very minimum, wait until a re-test of the support area from the Long-Legged Doji candlestick pattern is complete before making a second scale-in purchase of the stock.

LB – Moving Averages

This last Limited Brands (LB) stock chart is a 1 year daily candlestick chart. I use daily candlestick charts when analyzing moving averages.

The moving averages chart suggests a possible push up towards the 200 Day moving average, which by the time LB’s share price get there would probably be around the $57 price level. LB’s share price needs to print a $57.11 to “close the window” or close its gap-down that occurred back in February 2017 after its earnings report. If it can do that before starting to consolidate, it is possible that LB’s share price is confirming the downtrend is over and to purchase the pullback after the gap-down is closed.

Limited Brands (LB) – Summary

This Limited Brands (LB) stock chart review has provided an uplifting perspective.

If you are interested in trying to trade Limited Brands (LB) back up to the 200 Day moving average, make a small scale-in purchase at current prices after making sure the 50 Day moving average provides support in the next couple days.

Any re-test of the Long-Legged Doji candlestick pattern support area is an excellent opportunity to initiate a long-term position for your portfolio. A second scale-in-in purchase would be made either on a break below the support area near the $40 level or when LB’s share price breaks above the 200 Day moving average on buying volume that is greater than normal trading volume.

Long-term, a break above the 200 Day moving average is most likely the indicator that an overhead price target of $80 is back in the cards. Until then, baby steps. Maybe a little foreplay with the portfolio…

Good luck trading and ask away with any questions!

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