A Breakout Is Imminent

A Breakout Is Imminent


I’m always intrigued by huge bases from stocks that are trading near their 52-week low. Normally a prolonged period of contraction leads to a prolonged period of expansion. Iconix Brand Group has been in a range for roughly 11-months, the stock has traded between roughly $6 to $8.75. Previously the stock was in a persistent downtrend since September 2014 after hitting a high of $44. After a massive gap down in November 2015, the stock started losing momentum to the downside and started to trade sideways. This is when the buyers and sellers start to find equilibrium, very simply, the sellers start to run out of inventory and or the buyers are taking all the supply plus a little more.

At the end of the base right before the stock explodes to the upside what you tend to see is the stock hovering near recent highs instead of constantly testing the lower end of the base.  This is exactly what is happening right now with $ICON as you can see in the chart below. Based on the price pattern it is obvious ICON has a new set of stockholders that see greener pastures ahead.

If ICON can clear the top of its 11-month base it has a very good shot at making a significant move in the short-term.
Iconix Brand Group, Inc., a brand management company, owns a portfolio of consumer brands across women’s, men’s, entertainment, and home industries in the United States and internationally. Its brand portfolio includes Candie’s, Bongo, Badgley Mischka, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific/OP, Danskin/Danskin Now, Rocawear/Roc Nation, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter, Waverly, Ecko Unltd/Marc Ecko Cut & Sew, Zoo York, Sharper Image, Umbro, Lee Cooper, Strawberry Shortcake, and Artful Dodger.


Previous Articles about bases;
My opinion and outlook are subject to change as new information comes in.
Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at fzorrilla@zorcapital.com or 646-480-7463. 
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
By | 2018-02-02T12:08:10+00:00 September 6, 2016 1:53 pm|

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