Shares of Five Below (FIVE - Get Report)  were down about 4% in midday Thursday trading, but ended up closing lower by just 1% at $121.81. The decline comes after what many investors consider solid first-quarter earnings results. 

The quick take? I'm not a buyer of Five Below stock until it can find its footing. It doesn't help that downtrend resistance continues to squeeze shares lower. Until the stock can reclaim some of its prior support levels, lower prices may be in order.

That's even as earnings of 46 cents per share grew 18% year-over-year and easily topped analysts' expectations of 35 cents per share, while revenue rose 23% YoY and also topped expectations. Management's full-year earnings and revenue outlook also topped consensus estimates.

So what gives?

Comparable-stores sales growth of 3.1% missed expectations of 3.8%. Further, worries over tariffs could be weighing on investor sentiment, as management said, "we are concerned about higher tariffs as they will be impactful to our business." It joins the list of other retailers that have had tariff-related comments this quarter, including Home Depot (HD - Get Report) , Costco Wholesale (COST - Get Report) and PVH Corp (PVH - Get Report) .

Let's look at the charts.

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Trading Five Below Stock

Weekly chart of Five Below stock.
Weekly chart of Five Below stock.

The weekly chart above shows Five Below stock testing into some pretty significant support. Not only is it resting on long-term channel support (blue line), but it's also just above the 50-week moving average at $117.58.

Resistance near $135 is pretty evident, as is the stock's short-term downtrend channel (purple lines). If support gives way, a decline down to $110 could be in the cards.

Why $110?

Not only is this a significant level on the daily chart below, but it's also approximately the 61.8% retracement for the one-year range. This leaves Five Below stock at a make-or-break level right now. Either the 50% retracement at $117.50 will hold and FIVE stock will reclaim its 200-day moving average at $120.79, or it will fail as support and lead to lower prices.

Daily chart of Five Below stock.
Daily chart of Five Below stock.

If these levels do hold as support, we need to see Five Below stock break out over downtrend resistance (purple line on both charts) and reclaim the 20-day moving average. Should Five Below stock fail to hold its current support levels, $110 should attract buyers.

At current levels, FIVE stock is down almost 20% from its highs made at the end of April. Sitting on the cusp of a technical bear market either leaves the stock poised to draw in buyers or attract more sellers. Thus adding to the make-or-break setup. 

While the quarter was good and the stock seems oversold in the short term, I need to see some bullish momentum first. Watch $117.50. If Five Below stock stays above that and reclaims the 200-day, then maybe it can push through resistance. Below Thursday's lows could drop it to $110, though.

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.