Croc’s and Deckers are Forecasting a Tropical Winter

A few weeks back on August 29th I took a look at Croc’s, $CROX, in Buy More Shoes! it still looks good and is in another bull flag. The last three candlesticks have been dojis and Tuesday’s a bearish Spinning Top. But with the Relative Strength Index (RSI) moving up and bullish and the Moving Average Convergence Divergence indicator (MACD) positive, the rest of the signs point

Croc’s, $CROX

higher. A move over 18.40 sees resistance next near 20. Another darling of the 2010 – 2011, Deckers Outdoor, $DECK, looks quite the opposite though. After bouncing from a long 9 month run lower it is falling back again toward the low at 40. This chart is supportive of more downside with the SI trending lower and about to head into bearish territory and the MACD negative and growing.

Deckers Outdoor, $DECK

Each of these in their own right could be a lucrative trade but the pairs trade set up form the ratio chart below is very compelling. Breaking the descending triangle lower under a ratio of 2.50, with a RSI that is bearish and trending lower and a negative MACD it has a target on the triangle break of 1.50.

Trade: Buy 5 $CROX and Sell 2 $DECK with a stop at a ratio of 2.55 looking for a target of 1.50.

With $CROX at about 18.25 and $DECK near 45 the move could yield as much as $35 to $59 per pair. That buys a lot of shoes!

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

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.

blog comments powered by Disqus
Dragonfly Caps Blog