Shoe Stock Setups Laid Right at Your Feet

• Posted by Greg Harmon
• on July 20th, 2011

The height of earnings season can be a tough time for swing traders. Most do not want to have the earnings event impact their trade so the review process becomes a bit harder and opportunities are more limited. Let me help out by placing a few ideas that are ready to break out right at you feet. Literally. Footwear has been a good sector and the charts for Crocs (ticker: $CROX), Nike (ticker: $NKE) and Steve Madden (ticker: $SHOO) look great. The best part is that none of these stocks report earnings until August at the earliest so you have a little time for a breakout to happen. let’s take a look.

Crocs, $CROX

Crocs, $CROX, has been in a strong uptrend and recently pulled back to a base at 26. It is now moving higher again and about to challenge the previous high at 28.28. If it can get over that then it has a Measured Move (MM) to 30. The Relative Strength Index (RSI) is rising and the Moving Average Convergence Divergence (MACD) is improving toward zero, both supporting more upside.

Nike, $NKE

Nike, $NKE, Had a large move higher and then stalled at 94 and has been pulling back. It is now just above support at 89.70-90.00. As it sits there the MACD has crossed lower and the RSI is sloping lower. But this could also be interpreted as a bull flag. If it can get back over 92.50 then the bull case will win and look for a move to resistance at 94.23 and then a MM to 105. If however it falls under 90 then the bear case prevails and a support target of 86 comes into play. Wait for the market to give you one and then take it.

Steve Madden, $SHOO

Steve Madden, $SHOO, is trying to break a bull flag higher after a large move up from 34 to the 40.50 area. The last three candles though have started to create an expanding wedge, with a potentially bearish Dark Cloud Cover Wednesday. The RSI is turning lower and the MACD is about to cross negative, giving more weight to the downside. If it falls below 39.50 look for a breakdown lower to support at 38.20 and then 37.50 before the 36.00-36.20 area. If it can get above and hold over 41 then it has a MM to 46. Again, watch and take whichever setup the market gives you.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

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