Casual sportswear apparel retailer Abercrombie & Fitch (ANF) has seen choppy going year to date but has rallied strongly off the June lows. In fact, the stock’s rally since the June 24 lows in the broader market has now taken the stock right back to an important area of resistance where the stock has failed twice since early June.
On the multi-year chart, note that since February the stock has struggled to stay above the 50% retracement mark of the entire sell-off from the October 2011 highs down to the August 2012 lows. The sell-0ff in May and June pushed ANF below what was support as of February, but the subsequent sharp rebound quickly invalidated the lower low. From this longer-term point of view, a push past the $54 level that lasts for more than a few days would be constructive.
On the daily chart the recent three tries to push past the $52 area are clearly marked. A push past there has a first target near the May daily closing highs around $54.50. If the stock can stay above there for a few weeks, then it qualifies as a bullish sign on the longer-term chart above as well. As the broader stock market thus far continues to hold up, stocks such as this one could continue to favor by being chased higher by fund managers looking to get involved. Important to note is that ANF is scheduled to report earnings on August 22, which is still a little over two weeks away.