7/20/2017 – Limited Brands (LB) Support Re-Test
On July 5, 2017, Limited Brands (LB) reported less than stellar monthly comps for June 2017. Call it a "skimpy" sales report. This was the 7th straight month of dismal monthly sales according to a Zacks Investment Research article I read.
In my previous Trendy Stock Charts article for Limited Brands (LB), I warned of one more probable pullback. That pullback should find support as mentioned
......., 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.
That article can be quickly accessed here "6/8/2017 – Limited Brands (LB) Stock Chart Analysis".
Limited Brands (LB)
Let's look at one more comment from the previous article and then look at some current charts.
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.
This first chart is an updated 2 year weekly chart from the June 8, 2017 article. It shows that LB's share price reached $55.98, slightly less than the $57 price target I mentioned above.
LB's share price did not break below the bottom of the Long-Legged Doji candlestick pattern, a successful re-test so far. A Long-Legged Doji candlestick pattern at the bottom of a long downtrend is a potential reversal signal.
But is the re-test of the bottom over yet? Is it warranted to make a scale-in purchase at this point?…...
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I look at the $43 support area in more detail as well as provide the next support level below in case the $43 support level fails. It is important to know where your downside risk is as well as the next area to make a scale-in purchase.
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