Foot Locker (FL) continued its recent struggles on Wednesday. The athletic wear retailer dropped over 1.7% stretching its decline from last week's high to nearly 6%. This steep pullback has now pushed the stock below the March low and is likely headed lower before another key support zone is reached.
Back in late February, FL was holding in a narrow range ahead of its fourth-quarter earnings report. The day before this news hit, investors were very defensive as shares fell over 3.4% on Feb. 23. The next morning, FL surged on very positive results results and, by the closing bell that day, had gained 9.4%. The stock went on to reach new 2017 results leaving behind a powerful spike low near $68.50 in the process.
As the current pullback continues patient FL investors should expect a very low risk entry opportunity for this A-rated stock. A solid support zone is in place near the upward sloping 200-day moving average. Just above this level is the pre-earnings low set back on Feb. 23 at $68.50. If the stock can regain is footing here a new base could begin to form. Until then, FL may prove to be a painful buy. On the downside, a close back below the $65.50 area would violate the January 2017 low indicating a more drawn-out bottoming process is ahead.
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