Helen of Troy's Charts Show Their Age, and Its Latest Results Won't Help
The maker of beauty products, household items and outdoor gear doesn't look like a buy based on its technical signals and sagging earnings.
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Helen of Troy Limited HELE has declined the past two months and has filled a gap from July. The charts indicate that HELE could head lower in the weeks ahead, and the fiscal second-quarter results that the producer of beauty products, household items and outdoor gear reported here on Wednesday likely won't help as its revenue and earnings were well below year-ago levels. So, let's give Helen of Troy a closer look.
In this daily bar chart of HELE, below, I can see that prices are trading below the declining 50-day moving average line but above the rising 200-day moving average line. The trading volume has not increased the past two months so prices are falling of their own weight. The On-Balance-Volume (OBV) line shows a peak in early August and its decline suggests that sellers of HELE have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line.
In this weekly Japanese candlestick chart of HELE, below, I can see that prices suffered a major decline in 2022 before a rebound rally in April 2023. Prices are retracing their advance and are poised to retest the 40-week moving average line. A number of recent upper shadows on the candles tell me that the path of least resistance is probably lower. The weekly OBV line turned upward in July and is now heading lower again. The MACD oscillator has crossed to the downside and looks headed back to the zero line.
In this daily Point and Figure chart of HELE, below, I can see a potential downside price target in the $97 area.
In this weekly Point and Figure chart of HELE, below, I used a five-box reversal filter. Here the software tells me that HELE reached its price target in the $142 area.
Bottom line strategy: The folks at Action Alerts PLUS were interested in Helen of Troy's results because of what they might signal for its position in cosmetics maker Coty Inc.COTY . I can't say what the impact of those results may be on Coty, but the charts of HELE look weak and traders should avoid the long side of the stock.
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