The Foot Locker (FL) weekly chart illustrates the laborious climb the stock has made since November last year.
It has been a process of sharp upside moves followed by deep downside retreats. A two step up and one step back pattern. This movement has taken place, generally, between the Fibonacci retracement levels of last year’s range.
In January 2017, Foot Locker shares completed a triple top formation and then spent the rest of the year in free-fall. They dropped over 60% before finding support in the $27.50 area.
That’s where the awkward recovery process began and the retracement levels have been both support and resistance along the way. Now it looks like the current downtrend line is being broken and the stock is ready to begin another period of upside.
On the daily Foot Locker chart, the most recent pullback can be seen filling the open gap at $46, which is also the 62% retracement level on the weekly chart. Shares have moved over the merging 50 day and 200 day moving averages and they should help supply future support.
Now the next obstacle is the downtrend line drawn off the highs since June, and then the $51 level, which is the 50% weekly Fibonacci retracement level.
The price and money flow momentum indicators are flat. These readings are a reflection of the compression in range as FL shares have approached the apex of the triangle pattern.
An upside break out appears imminent but a sustained move will require an increase in positive money flow.
The footwear retailer is going to pay its next dividend on Oct. 18.