Ditch the Deck; But Keep the Uggs. (March 11, 2015)
I want to look at Deckers ( NYSE:DECK ), here’s why. You see this stock, it gapped down and traded even lower on really disappointing earnings, and then had a nice move to the upside, right? So now the stock’s been drifting lower, it looks like maybe this is a stock to buy, because it’s got a higher low; and that my very well be the case.
What I’m suggesting here is define your time frame before you buy it. By the way, I wouldn’t buy this right now. There’s a buyer and a seller for every share of stock all at the same time, so some would look at this as a higher low. But this is what I want to point out to you; from where this stock is right now everybody who traded in this box, we’ll just go back a few months because if you go back far enough do you really think the guy who bought here is still long after all of this? Do you really think the lady who bought here is still long after the stock went clear down here? Or the guy who shorted right here is still short after the stock moved up here?
The bottom line is, the longer back in time you go, towards the left side, the less relevant the price action becomes. But if we’re looking here, this is all recent stuff, these folks are losers; a lot of them that bought here have probably sold right up here. So in my view there’s still a lot of supply on any further increase in the stock. So this would be like one of those quick short-term counter trend trades, right? But man, zoom out like I’ve just done here, this thing looks like death on a stick. I mean, big pullback, rally up here and now it’s moving lower again, just like we saw here, big old topping pattern.
But you look at the weekly chart, this isn’t ugly, this is “fugly”, I mean the stock is just really, squeeze, move to the upside, pullback. Here, what do we see? I my view this is a double top; top one, top two. Whammy! This is a stock that you don’t want to own. Since I’m spending a lot of time back in Minnesota with my wife, where she still lives at least for the next several months, I actually have three pairs of UGGs, I like UGGs, they’re very comfortable, but I hate the stock right now. So stick with the UGGs, ditch the DECK ( NYSE:DECK ), and I think you’re going to do just fine.
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