Abercrombie’s Stock Gets Obliterated — 3 Reasons Why a Company Would Be Crazy to Buy It
When Abercrombie & Fitch (ANF) first announced it was in talks to sell itself, it came as a bit of a surprise. Many wondered why any company, American Eagle Outfitters (AEO) and Express Inc. (EXPR) were rumored to have taken an interest, would want to buy the ailing retailer. So, when Abercrombie announced on Monday, July 10, that it had terminated discussions with “several parties” regarding a possible deal, it didn’t come as a shock.
“After a comprehensive review of all relevant factors, with the assistance of our financial adviser, the A&F board of directors determined that the best path to enhance value for stockholders is the rigorous execution of our business plan,” said Arthur Martinez, executive chairman of Abercrombie.
Abercrombie & Fitch Stock Dives To 17-Year Low After Buyout Talks Choke
Abercrombie & Fitch (ANF) has ended discussions about a potential transaction, sending shares south Monday. The teen-focused apparel retailer announced in early May that it had begun engaging in preliminary buyout talks with several parties.
Suitors included Express (EXPR) and a combined effort from American Eagle Outfitters (AEO) and Cerberus Capital Management, said the Wall Street Journal. Shares plunged 21.1% to 9.59 in the stock market today, hitting their lowest levels since June 2000.
Abercrombie & Fitch Co’s (ANF) problem isn’t Amazon. The online retail giant hasn’t been acquiring specialty apparel retailers, at least not yet. It is the failure of Abercrombie leadership to reinforce WOM and buzz marketing for its products. There was time ANF’s sales were soaring, catching the attention of Wall Street and sending its stock racing towards the $70 mark.
That was back in 2008, and once again early in 2011. Then the company’s sales and stock begun heading south. In the most recent quarter, for instance, revenue dropped by 3.60%, sending the company’s shares to the low teens.
How to Day Trade the Best Stocks and Adjust to the Market
Day trade the market or day trade your stock and ignore the market? What is your game plan if the market finally runs out of buyers?
Did you learn from 2007-08? Are you prepared with strict stop-loss orders? Are you ready to be in cash if you can’t find awesome risk/reward scenarios for new long positions?
Most day traders like to be “long.” We like to be buyers.
It’s easier to understand than short-selling and technically has defined risk (you know where zero is). If this is you, it’s time to get prepared. Great day traders look for new ideas regardless of existing positions.
You should do the same.
On the Tape Today | 7-11-17
RH showing an expected decline after a vicious rally. Looking for a lower open to bid for a new long position. If the stock price opens higher I will let it go. Game planning a $58.50 limit order to buy with a stop loss on a close below $57. Swing trade target to sell comes in at $67.50.
Stock Trading Today
The SPY ETF hourly chart appears to be a perfect test of the downtrend resistance.
However… the daily chart is well-bid for consecutive days. The indecision remains decisive. I am inclined to trust the long-term bullish bias but reading the tape shows a warning sign. Look at the individual candlesticks.
Bearish days far outweigh the the closes above the open, generally this is a sign of distribution but… we aren’t seeing distribution type volume. Volume traded for the SPY ETF was just over 36 million shares! HALF of the average daily volume.
I am trading stocks full-time since April 2000. Never have I seen so much apathy near all-time highs. But… there is plenty of opportunity outside of the general indices. Retail stocks got hammered and gave us solid momentum.
If you’re missing these types of trades I suggest 2 ways to fix it, expand the universe of stocks you normally trade. Number two is to start using a scanner. The upside is you won’t miss the trades. The downside is, you might not feel comfortable trading new stocks.
I say get uncomfortable. It’s better than making excuses.
Stock Market Today
Stocks to Trade | 7-11-17 Tuesday Edition
Bullish Momentum: CF, MOMO, LEN
Bearish Momentum: dks, fl, bbby, wmt, rost, tjx, dltr
Bullish Order Flow: WYNN, DE, BABA, CAT, ADBE, BA, EXAS, PNC, AMGN, AET, TSO, CELG, MCD, UNH, RH
Bearish Order Flow: dks, fl, bbby, rost, tjx, dltr, cost, tgt, trip, tsco, khc, hds, stx, apc, dvn, nfx, hal, clr
Double Normal Volume: BBY, COST, YUMC, FTR, CRZO, ADP, CARA
Inside Day: c, wfc, phm, xom, adp, csx, sbux, aal, met, ual, jblu, stx, slca, myl, khc, nwl, coh, skx, mcd, cop, axp,
ccl, kmx, ups
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