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Is Under Armour Inc Stock Bottoming?

Tyler Craig

Under Armour Inc (NYSE:UAA) shares recently experienced their largest price jump following an earnings release in over two years. The positive change in character has bottom fishers swarming in hopes that the ailing retailer has finally found a floor. Let’s see what the Under Armour stock price chart has to say about the matter.

First, the positive earnings reaction was a huge win. The series of disappointing quarterly releases had long passed the depressing stage. Price plunges were becoming as predictable as President Trump’s tweets. Fortunately, this month UAA stock scored an impressive gap-and-run, which added 32% to its share price in short order.

Is Under Armour Inc Stock Bottoming?

Source: OptionsAnalytix

The pop carried shares above the 200-day moving average for the first time since Under Armour stock’s descent entered death mode in late-2016. We’ve also now seen enough chop and churn to flatten out and then lift the 20-day and 50-day moving averages. Chalk that up as a trio of victories for bulls.

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What’s Going on With Under Armour Stock

A glance at the weekly chart reveals UAA stock was able to carve out a higher pivot low ahead of the recent price jump. Although it’s subtle, it suggests buying appetite is finally increasing. This is the first time we’ve seen a higher low form since the death spiral began. The next step for Under Armour stock’s potential turnaround is breaking $18.50.

Breaching this resistance zone could complete the bottoming process seen in recent months and officially propel UAA back into a weekly uptrend.

Under Armour stock

Source: OptionsAnalytix

The low volume pullback in Under Armour stock we’ve seen over the past week is providing an interesting dip-buying opportunity for those willing to bet the newfound strength can continue.

Place Your UAA Stock Bets

Let’s offer up a pair of plays for the aggressive and conservative traders among us.

If you’re looking for a higher-octane, unlimited reward way for gaming further UAA stock upside, then buy the April $15 call for around $2.06. The risk is capped at your initial investment and will be forfeited if Under Armour stock sits below $15.

For a higher probability, lower reward approach, try purchasing the April $15/$17.50 bull call spread for around $1.35. If entered at this price, the risk is $1.35 and the potential reward is $1.15.

In timing the entry, wait for confirmation that Under Armour stock is pivoting higher. It may retreat for another day or two before buyers swoop in. Use a break of the prior day’s high as your trigger. Right now that would be $17.15.

As of this writing, Tyler Craig did not hold a position in any of the aforementioned securities. Want more education on how to trade? Check out his trading blog, Tales of a Technician.

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