Helen of Troy Is Hurting After Earnings Slip
The stock is - ouch - down by around 30%, let's see if there's any hope in the charts.
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Housewares and beauty supply company Helen of Troy HELE reported an adjusted earnings per share of $0.99 Tuesday morning, which missed estimates by $0.60 and revenue of $416.8 million, which missed by $29.05 million. The stock price of HELE is sharply lower, dropping by more than 30% at the time of publication, so let's check out the charts and indicators for any guidance they may give us.
Helen of Troy may not be a household name but the company owns well known brands such as water bottle maker Hydro Flask and kitchen supplies manufacturer OXO.
In this daily bar chart of HELE, below, I can see the price action through Monday's close. Prices are trading in the $66 area, so we have to use our imagination a bit. HELE has been trading below the declining 50-day moving average line and below the declining 200-day line for some time now. The trading volume increased at the late April low but that did not create a lasting bottom. The daily On-Balance-Volume (OBV) line has been mostly weak since August. The Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero-line.
In this weekly Japanese candlestick chart of HELE, below, I needed to go back 10 years to gain some perspective on the decline this morning. In this chart I can see that prices are back to levels not seen since early 2015. Ouch. Trading volume has been more active since late 2022 as traders voted with their feet. The slope of the 40-week moving average line is negative. The weekly OBV line has been pointed lower for over three years. The MACD oscillator is bearish.
In this daily Point and Figure chart of HELE, below, I can see that prices reached and exceeded a downside price target in the $89 area.
In this weekly Point and Figure chart of HELE, below, I can see that the software is looking at a downside price target in the $49 area.
Bottom line strategy: It is a serious chart event when a stock gaps down to a new low. It is a very serious chart event when analysts have to consult a 10-year chart to get ideas on where prices could decline.
HELE may establish a low on the charts soon if trading volume is very heavy (called throwing in the towel) but a bottom will likely take a lot of time to develop. Avoid the long side of HELE.
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