Trade of the Day: TIF Stock Could Shine… for Short Sellers

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Tiffany & Co. (TIF) — The high-end jewelry designer and retailer reported weak quarterly results last week, hurt by strength in the U.S. dollar. Earnings of 70 cents per share fell 4 cents short of the consensus estimate, and the company reported revenue of $938.2 million versus an estimate of $972 million. Comparable-store sales in the Americas, which account for more than 50% of revenue, fell 6%, impacted by lower tourist sales.

Following the report, S&P Capital IQ Equity Research, which has a “hold” rating on TIF stock, lowered its 12-month price target by $5 to $87. But this is based on an above-average P/E of 20 times its analysts’ fiscal year 2017 EPS estimate of $4.35.

TIF stock made a high at about $110 a year ago. Since then, it has plateaued in a series of flatline consolidations while maintaining a long-term downtrend.

Note the June-to-August rectangle that broke down through its 50-day and 200-day moving averages in mid-August at about $93. TIF stock appears to be consolidating in a similar pattern now with support at $74 and resistance at about $84.

Technically there are several positives that could boost shares to the top of the rectangle, where they would make a good short sale candidate:

  1. A double buy signal from my proprietary indicator, the Collins-Bollinger Reversal (CBR), at $78;
  2. A short-term MACD buy signal; and
  3. Recent high-volume buying.

Sell TIF stock short at $84 with a downside target of $74 for a potential profit of 12% by year end.

TIF Stock Chart
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Chart Key


Article printed from InvestorPlace Media, https://investorplace.com/2015/12/trade-of-the-day-tif-stock-could-shine-for-short-sellers/.

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