Ralph Lauren ($RL) & Foot Locker ($FL) both offer objective long entries with limited risk

Ralph Lauren and Foot Locker have very similar recent price action and chart set ups.

  • Both companies blew their recent earnings in May out of the water
  • Both gapped up on high volume and peaked in early June
  • Both have pulled back to gap support and have held
  • Both have RSI profiles that look bullish

 

  • Both have PPO momentum profiles that appear to be resetting near the zero line. In my experience momentum resets from above near the zero line are bullish.
  • Both have clear lines in the sand close by to shoot against if going long. That is the gap support as shown on each chart. Stops could be placed just below the recent lows on a closing basis.
  • If the broad market cooperates, I believe these stocks will grind higher ahead of earnings in mid August.
  • My target for both would be near or at the recent June highs.
  • I like both these set ups, but the one difference between them is that Ralph Lauren has a better track record of out-performing both SPY and its industry group. ( shown in the lower panels of the $RL Chart )  The Foot Locker set up is fine but its recent 52 week price history is much more choppy than is the case for $RL

Annotated Daily Chart of $RL HERE       Annotated Daily Chart of $FL HERE

Disclosure: No Positions at this time

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