Under Armour Inc (UA) Stock Set To Resume Upward Path

wall streetRick Pendergraft:  Over the course of the last three years, you would be hard pressed to find a stock that has performed as well as Under Armour (NYSE:UA). The athletic footwear and apparel manufacturer saw its stock more than quadruple from late 2012 to its high this past summer. Since that high in September the stock has been pulling back, and I believe it is providing investors with the chance to buy the stock.

Looking at the daily chart, we see that the stock just moved out of oversold territory. This is only the fourth time in the last year that both the stochastic readings and RSI have both been in oversold territory. In August, the last time it happened, the stock rallied from below $85 a share to the high of $105.89 in September.

UA Daily Wyatt

While the daily chart shows a short-term buying opportunity, the weekly chart shows the strong rally Under Armour stock has experienced in the last few years. It also shows how a trend channel has dictated trading over the last year and a half.

The first thing that jumped out at me was how the stock hasn’t closed below its 52-week moving average since March 2013, but it just bounced off that moving average earlier this week. We also see that the weekly stochastic readings and the 10-week RSI are at or close to levels where the stock has reversed from any pullbacks over the last couple of years.

UA Weekly Wyatt

Despite the incredible rally in Under Armour, the sentiment toward the stock is still somewhat bearish. The short interest ratio currently sits at 5.08 and of the 32 analysts covering the stock, 13 have it rated as a “hold” and the other 19 have it rated as a “buy.”

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