Trade of the Day: FL Stock About to Make a Run Higher

Foot Locker, Inc. broke its bearish resistance line, turning its major trend to bullish

Foot Locker, Inc. (NYSE:FL) — Shares of FL stock jumped 1.3% on Friday after an analyst at Susquehanna initialed a “Buy” rating on the athletic footwear and apparel retailer. While the analyst also initiated “Buys” on Dicks Sporting Goods Inc (NYSE:DKS) and Under Armour Inc (NYSE:UA) due to strength in the athletic and casual athletic footwear market, he called FL stock a “top pick” and set a price target of $73.

Another firm, B. Riley, also increased its rating to “Buy” from “Neutral” on Friday and set a $75 price target.

Foot Locker is scheduled to report earnings on Aug. 19. The consensus is expecting a 7% increase in earnings to 90 cents per share on 4% revenue growth to $1.76 billion. For the full year, analysts expect earnings to jump 10% to $4.72 per share on a 4.6% increase in sales to $7.76 billion.

Turning to the chart, we see that following a high above $77 in September, FL stock descended into a bear market. But shares reversed direction in June, following a buy signal from my proprietary internal indicator, the Collins-Bollinger Reversal (CBR), and began July by smashing through their 50-day moving average.

On Thursday, FL stock breached its 11-month bearish resistance line at about $60 as it turned its major trend from bearish to bullish. It challenged its 200-day moving average at $61.77 on Friday with an intraday high of $61.96. The breakout was preceded by a strong CBR buy signal at about $57. MACD also rendered a buy signal on Friday, and throughout August, the stock has been registering above-average accumulation.

Buy FL stock under $61 with a trading target of $70 for a potential return of nearly 15%. The company also pays a quarterly dividend of 27.5 cents for a forward annual yield of 1.9%.

FL Stock Chart
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Article printed from InvestorPlace Media, https://investorplace.com/2016/08/foot-locker-inc-fl-stock-trade-day/.

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