Going Shopping for Ascena Retail Group

• Posted by Greg Harmon
• on September 30th, 2015

Ascena Retail Group is a specialty retailer with several brands. The top ones are Justice, Lane Bryant and Dress Barn. Yes, this is not Neiman Marcus or even Nordstrom. And the stock is has taken a hit over the summer from its highs in mid June.

The chart below shows a a gap down in July and then continuation to a low with the market August 24th. This took it below the 200 day SMA and finally out of the Bollinger Bands®. But since August 24th it has done nothing but move higher.

In fact the move up to 14 took it back over the 200 day SMA last week. The slight pullback since created a Cup and Handle pattern, and this targets a move to 17 on a break higher. The conditions are ripe for this to happen. The RSI is rising in the bullish zone while the MACD is avoiding a cross down and heading higher too. With over 13% short interest there is also the possibility of a short squeeze to give it a boost. The last hurdle seems to be the 100 day SMA at about 14. And it is breaking that now. Time to go shopping.

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