In his first Executive Decision segment of last Friday’s “Mad Money” program, host Jim Cramer spoke with Tim Boyle, Chairman, President and CEO of Columbia Sportswear (COLM), an outdoor apparel maker that reported strong fourth-quarter profit growth last week.
Boyle acknowledged that Columbia was seeing supply chain disruptions around the world, but he said the company had done everything it could to mitigate them and was able to generate fantastic revenue.
Asked about that revenue, Boyle said consumers were smart and bought early last year, leading to fewer promotions and higher gross margins. Columbia has also slowed its online sales to help retailers and ensure they have all the inventory they need this winter.
Let’s review the Columbia maps again. The last time we tried on COLM maps was August 19, 2020.
In this updated daily bar chart from COLM, below, we can see that prices have been trading lower since late April. Prices are trading below the 200-day descending moving average line and testing the 50-day descending line. The On-Balance-Volume (OBV) line shows intermittent weakness from April as traders have been more aggressive sellers than buyers. The Moving Average Convergence Divergence (MACD) oscillator crossed a cover short buy signal but remains below the zero line.
In this weekly Japanese candlestick chart from COLM, below, we see a less than positive picture. Prices are trading below the descending 40-week moving average line, so the medium-term trend is bearish. The most recent candle is white (bullish) but shows an upper shadow as traders rejected the week’s highs. The OBV line shows weakness from April and the MACD oscillator is bearish.
In this daily dot-and-digit chart from COLM, below, we can see a potential price target on the upside of $106.
In this weekly Point and Figure chart from COLM, below, we can see a downside price target of $79. A rebound then a decline?
Basic strategy: COLM charts and indicators do not yet show a clear upward trajectory for prices. We may see COLM bounce further higher in the near term, but indices are pointing to further declines in the coming weeks. Avoid the long side of the stock but consider buying the products.
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