After two months of bouncing between $6.50 and $7.50, the stock saw lows in the range of $6.20. This occurred on significant volume with earnings occurring in less than two weeks.
From a technical standpoint, the stock appears to have met a new resistance between $6.00-$6.22 (See graph for details). The fibonacci next resistance would be about $5.90, but I believe that is lower than the actual resistance based on previous price action.
If the stock goes below $5.90 per share, I will consider exiting my position, but until then, I believe we are set up for a push back higher to the $7 range before earnings.
From a fundamental perspective, this stock is very bullish. Luxury brand sales are at an overwhelmingly high demand (see multiple specials and articles by WSJ and CNBC). China retail demand is high. Plus, COTY just sold a portion of its business and received nearly $3b to pay down debt. Additionally, it acquired Kim Kardashian's beauty line. And of course, it has Kylie Cosmetics, which has recently expanded to new regions. And the Exec. VP was just quoted in a magazine saying that their Cover Girl brand had an unexpected surge in demand on Amazon Prime Day.
I think we see an earnings beat and a significant jump in the stock price to reflect a multiple that is more in line with competitors like Estee Lauder and L'Oreal.
I'm long on this stock. With this dip, I averaged down and picked up some cheap February 19, 2021 call options in anticipation of a strong earnings report.
Edit: Also, on Friday with the dip, out of 49k options traded, there were 42k calls picked up.
From a technical standpoint, the stock appears to have met a new resistance between $6.00-$6.22 (See graph for details). The fibonacci next resistance would be about $5.90, but I believe that is lower than the actual resistance based on previous price action.
If the stock goes below $5.90 per share, I will consider exiting my position, but until then, I believe we are set up for a push back higher to the $7 range before earnings.
From a fundamental perspective, this stock is very bullish. Luxury brand sales are at an overwhelmingly high demand (see multiple specials and articles by WSJ and CNBC). China retail demand is high. Plus, COTY just sold a portion of its business and received nearly $3b to pay down debt. Additionally, it acquired Kim Kardashian's beauty line. And of course, it has Kylie Cosmetics, which has recently expanded to new regions. And the Exec. VP was just quoted in a magazine saying that their Cover Girl brand had an unexpected surge in demand on Amazon Prime Day.
I think we see an earnings beat and a significant jump in the stock price to reflect a multiple that is more in line with competitors like Estee Lauder and L'Oreal.
I'm long on this stock. With this dip, I averaged down and picked up some cheap February 19, 2021 call options in anticipation of a strong earnings report.
Edit: Also, on Friday with the dip, out of 49k options traded, there were 42k calls picked up.