HOKA, UGG Could Be in Trouble as Distributor Faces Lower Prices
Footwear distributor Deckers Outdoor Corp. has seen its shares sinking and more trouble appears to be ahead.
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Deckers Outdoor Corp. DECK shares are sinking Wednesday after a cautious note from M Science, a research and analytics firm, suggested that demand for HOKA sneakers and UGG shoes was slowing.
Let's check and see how things are fitting over at DECK on the charts.
In this daily bar chart of DECK below, I can see that prices have weakened since early June and have just broken sharply below the 50-day moving average line. The On-Balance-Volume (OBV) line peaked back in March and is still pointed lower. A weak OBV line tells me that sellers are more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator has weakened too and is now below the zero line in sell signal territory.
In this weekly Japanese candlestick chart of DECK below, I can see that prices have made a major long-term rally in the past three years. Prices are pulling back to the prior rally high where many traders may be expecting some buying support. Prices are still above the 40-week moving average line but this is a lagging indicator. The weekly OBV line has been stalled for the past four months or so. The MACD oscillator has weakened from March to June and has made a bearish divergence when compared to the price action. Bearish divergences can sometimes foreshadow price weakness.
In this daily Point and Figure chart of DECK below, I can see a price target of $751.
In this weekly Point and Figure chart of DECK below, I can see a software-driven price target in the $706 area.
Bottom line strategy: Prices look like they are still headed lower and a break of chart support in the $850 to $800 area could precipitate further declines in the weeks ahead. Traders and investors should avoid the long side of DECK.
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