Urban Outfitters' Charts Show Stock Is Treading in Dangerous Territory
NEW YORK (TheStreet) -- Shares of clothing retailer Urban Outfitters (URBN) - Get Report, which is scheduled to report its quarterly results after the closing bell on Monday, have been on a momentum upswing since they set a multiyear low following an earnings miss reported on Nov. 17.
Analysts expect the company to report to earnings of 57 cents a share for its fiscal fourth quarter ended in January. There is some chatter that the retailer is poised to beat this estimate, but a better-than-expected report may already be factored into the stock, which has gained 11% this year.
Let's take a look at Urban Outfitters' performance measures, key trading levels, and analysis of daily and weekly charts.
Urban Outfitters ($38.89) declined 5.3% in 2014. The stock is up 39% from its Nov. 18 low of $27.89 and is 2.1% below its Feb. 27 high of $39.74.
Investors looking to buy Urban Outfitters on weakness following its earnings report should enter good 'til canceled limit orders to buy to quarterly and semiannual technical levels of $34 and $31.77, respectively.
Investors looking to reduce holdings on strength should enter a good 'til canceled limit order to sell on strength to an annual technical level of $40.82.
Let's take a look at the daily chart for Urban Outfitters.
Courtesy of MetaStock Xenith
The daily chart shows the stock with lower lows and lower highs since 2013 with the 200-day simple moving average (green line) declining since the stock gapped below the average at $41.09 on Sept. 9, 2013. The stock was below the 200-day SMA until Aug. 6, 2014, when the average was $36.09.
Shares of Urban Outfitters traded as high as $40.67 on Aug. 27, and then plunged 31% to as low as $27.89 before rebounding 42% to the 2015 high of $39.74, which was well above the 50-day and 200-day simple moving averages of $36.30 and $34.87, respectively.
This chart volatility sets up for an interesting reaction to Monday afternoon's earnings report.
Let's take a look at the weekly chart for Urban Outfitters.
Courtesy of MetaStock Xenith
The weekly chart for Urban Outfitters is positive but overbought with its key weekly moving average (red Line) at $37.07. Below it's the 200-week simple moving average (green line) at $34.42. The momentum reading in red along the bottom of the graph reads 89.16 well above the overbought threshold of 80.00.
Note that the stock is 14% below its all-time intraday high of $44.96 set on May 20, 2013.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stock mentioned.