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Avoid the Long Game for Now for Columbia Sportswear

COLM looks like it could decline to $88 and break the May low, potentially tugging it down to around $82.
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During Monday's "Mad Money" program, Jim Cramer talked about retail, and was bullish on a few specialty brands, like Columbia Sportswear (COLM) . Let's see if the charts and indicators fit.

In this daily bar chart of COLM, below, we can see a wide trading range market. We can see twin peaks up around $110 in February and early August. There are lows in May around $92, and those lows are being tested.

COLM is below the declining 50-day moving average line and below the cresting 200-day line. The On-Balance-Volume (OBV) line shows a rise from early January to July, followed by some weakness into August suggesting a pick up in aggressive selling. The Moving Average Convergence Divergence (MACD) oscillator is now below the zero-line for a sell signal.

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In this weekly bar chart of COLM, below, we can see that prices have doubled over the past three years. In the past couple of months COLM has tested the rising 40-week moving average line (May) and closed below the line this month.

The weekly OBV line has been in a decline the past 12 months and is a serious bearish divergence and suggests that investors have been liquidating longs for a sustained period. The trend-following MACD oscillator shows a weak pattern with lower highs from 2018 to 2019, despite prices making higher highs. Another bearish divergence.

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In this Point and Figure chart of COLM, below, we can see a nearby downside price target of $88.

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Bottom line strategy: If COLM declined to $88 it would clearly break the May low and could precipitate further weakness to the $82 area. Reduce your long exposure.

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