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by Charalambos Pissouros

Is Under Armour Ready to Run North?

The stock of the athletic apparel company Under Armour (NYSE:UA) has experienced difficult times this year. In early February, it started tumbling fast, hitting a record low of 6.37 on May 14th. In contrast with the tech-related stocks, those of retail apparel have not recover their covid-related tumbles. There are a few exceptions, but Under Armour is not one of them. In its latest earnings reports, the company reported a loss of USD 182.9mn, which amounts to 40 cents per share, which was at least fractionally better that the consensus estimate of a loss of 41 cents per share. With that in mind, although sentiment and momentum investors are unlikely to find the stock attractive, some bargain hunters may take the opportunity to buy cheap.

However, from a technical perspective, we would like to see the price rising above its key obstacle of 10.55, which has been providing resistance since March 9th, before we start examining the bullish case. Currently, the stock remains stuck between that barrier and its all-time low of 6.37, and thus, we would consider the outlook to be neutral for now.

A decisive break above 10.55 would confirm a forthcoming higher high on the daily chart and consequently signal the upside exit of the aforementioned range. The next target for investors may be the 11.50 level, which is marked as a resistance by the inside swing low of February 6th, 2018. If they don’t stop there, more upside extensions could be possible, perhaps towards the inside swing low of March 23rd, at around 13.55.

Taking a look at our momentum indicators, we see that the RSI stands slightly below 50, and has just ticked up, while the MACD lies near both its zero and trigger lines, pointing east. Both indicators suggest a lack of directional speed, something that confirms our choice to stand pat for now.

On the downside, a break below the support of 8.10, which stopped the price from moving lower on June 26th, may drive the stock back to its all-time low of 6.37. If there are no buyers around there this time around, a break lower would confirm a new record low, and perhaps open the path towards the psychological zone of 5.00.

Under Armour Daily chart technical analysis

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