Stock to Sell #5 – Pier 1 Imports (PIR)
Specialty retail home furnishings chain Pier 1 Imports (PIR) operates over 1,000 stores in the U.S., Canada and Puerto Rico. In May, S&P reduced its rating to “two-stars” (“avoid”) based on “lackluster long-term growth prospects.” And in September, the company cut its earnings estimates for fiscal 2014, ended in February.
PIR’s chart shows a huge rounding top — a very bearish formation that, in September, confirmed a negative outlook by smashing through a support line at $21.50, accompanied by a death cross and downside breakaway gap. In October, the stock rallied from a low of $19 but was turned back by its 50-day moving average.
Sell PIR if you own it. Traders should consider a short sale at $20.50 with a target of under $18. A stop-loss at $22.50 is suggested.