Heading into Thursday afternoon's earnings report, ROST was tracing out a tight consolidation pattern between $105 and $99. This sideways action began shortly after the stock reached new 52-week highs on March 24. During this process, Ross held key support near the stock's powerful earnings-inspired Feb. 27 breakout gap.
With this support zone now taken out, ROST is likely headed lower in the near term. A drop down to the 200-day moving average would not be a surprise. This area, just above $90, also includes the stock's 2015 low set back on Feb. 2.
For patient investors, a continued drift down to this area would provide a very low-risk entry opportunity. ROST will likely return to oversold territory here and will have fallen over 17% from its March peak.