Following its latest quarterly confessional, Under Armour (NYSE:UAA) stock continues to prove it’s making all the right moves off the court. And if we’re to believe a couple analyst calls on the game moving forward, it’s looking like an opportunity for bulls to suit up at half-time.
Playing UAA stock as a bull has been an overall winning game the past several quarters at the earnings altar. But as Under Armour shareholders might also confess in private, bearish short interest refusing to go down without a fight has required a bit of stamina at times.
This week’s latest earnings event in Under Armour stock has done little to change those bullish, albeit challenging trends.
On Thursday the athletics outfit announced results for Q1 which continue to reaffirm Under Armour’s improving position off the court. The latest earnings pressure against UAA stock’s near 20% bearish short interest was backed by a profit and sales beat, as well as the company raising full-year guidance supported by strong international revenue growth of 12%.
Investors reacted to the report by sending UAA stock up 3.54% into the closing bell of Thursday’s game. That marks a gain of about 30% on the year. Intraday play also saw a new high for 2019. However, bears still haven’t thrown in the towel. Shares did finish the session at $22.82 and well-removed from $24.10 which was scored in early trade.
Still, if we’re to trust a couple analysts on CNBC pitching the idea that UAA’s reignited sales growth will lead to continued out-performance or the possibility for $30 in shares this year — notwithstanding a likely fight from bears, Thursday could mark a profitable half-time break for Under Armour stock bulls.
Under Armour Stock Weekly Price Chart
The weekly chart is once again showing a bit of sweat on the part of UAA bulls. Currently and within a rally that’s had its share of technical head-fakes, shares are showing some weakness as Under Armour stock looks to finish out the week with a slightly sheepish-looking doji candlestick. But it’s bears that should be fearful.
It’s our call that with UAA sporting a track record of moving higher in the face of challenging hurdles over the past 18 months, bulls should be ready to play after a short half-time break from profitable play. If the aforementioned $30 target is achieved, that could net investors roughly 30% and essentially doubling Under Armour stock’s current gain in 2019.
For like-minded bulls, I personally wouldn’t ‘just do it’ as athletics rival Nike (NYSE:NKE) likes to shout at its fans. My recommendation is play UAA stock long if the late February high of $23.41 can be taken out. The entry represents a second attempt at new relative highs and looks to get in on momentum below Thursday’s newly-established pivot within the uptrend.
And if Under Armour stock bulls really turn tail? Bottom-line, I’d initially set a stop beneath $21.61. That’s a blended exit with managed exposure of 7.6% that also makes enough sense, technically speaking, for bulls to throw in the towel
Disclosure: Investment accounts under Christopher Tyler’s management currently own positions in Under Armour (UAA) and its derivatives, but no other securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies and related musings, follow Chris on Twitter @Options_CAT and StockTwits.