Trade Idea: Short Tom Brady and Gisele

• Posted by Greg Harmon
• on January 23rd, 2011

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It is a well known fact that Tom Brady lost to the Jet’s last week because of his Ugg boots and that his wife Gisele likes to lounge in Lululemon wear. But do they shop at Pier 1 Imports too? Let me make the case through these three short ideas. They stood out to me for their possible connection and enormous potential based on the charts:

Deckers Outdoor, Ticker: DECK

Decker’s fell from its perch shortly after Tom Brady ended his season and put on his Man Ugg’s for the Winter. After losing support of the 50 day Simple Moving Average, it is accelerating down. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicator are both suggesting more downside. The next solid support is at 62.50, nearly 15% lower. DECK has about 12% short interest, a little over 3 days of volume, so it may be difficult to find shares to borrow. If you are in already great job.

Lululemon athletica, Ticker: LULU

Lululemon has fallen for its recent double top just under 75 and is now at a support area near 66.80. Friday it printed a bearish engulfing candle. Its RSI has just pierced 50 and is pointing lower and the MACD is growing more negative, all signaling more downside can come. If it does break below 66.80 (probably when Tom is spotted in his LULU sweats in Soho this week) it can fall to the next support level at 61.82 where the gap up started in December. Below that the next support is at 56.11. That is more than 15% below Friday’s close. This stock also has high short interest at about 11% or nearly six days trading volume.

Pier 1 Imports, Ticker: PIR

Pier 1 Import’s stock price has seen better days, falling from its December plateau around 10.50 to close at 9.65 Friday. But the bearish candle was the second in a row under the 50 day SMA and it is now searching for support lower perhaps at the 100 day SMA at 9.16. Previous price support does not come until about 8.8 from the November dip and then more solidly at 8.50 from the peaks in June, September and October. If it gets that far it is a 12% opportunity on the short side. It is no surprise that short interest is up on this stock, near 10% or nearly six days of trading volume.

I think it is clear from these charts that Tom and Gisele do shop at Pier 1 Imports. Perhaps her concession to him for the Man Uggs! Trade’m well!

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