Are jewellery retailers in focus for the next decade?
SIG is the leading retailer of diamonds worldwide and especially in the US. Since 2018 the company is not profitable.
Surpassingly, in q1 2020 it showed promising results with earnings equal to 76.2m USD and profit margin at 1.2%. Such a move was fuelled by online sales improvement and inflation fears across world.
However, in q3 2020 the enterprise has dropped 1B USD in revenue (6.14 vs 5.08) and earnings decreased by about 230m USD (72.6 vs -160.2). Moreover, today SIG has the highest Debt/Equity Ratio equal to 86.9% (the second worst number in the company's history 60.2%).
So let's start by considering these facts. While SIG is planning to become profitable in 3 years, its' financial results are not showing the same.
On the other hand, technical analysis shows that it has many reasons to grow:
1.The price started the rally at the end of March and still holding rising channel.
2.The price broke medium-term falling channel yesterday.
3. The price has consolidated at support level of long-term decreasing channel.
4.RSI indicate further uptrend and set at support level of the triangle.
5. EMA 21 is at support level of long-term decreasing channel and EMA 50 is below rising channel.
On the other hand:
1. The last candle looks like Evening Doji star
2.RSI looks so strong for this stock. If such a trend is supported by fundamental I am ok with it. However, I can find non.
Hence, stay focus. I would recommend:
-Short from 20-20.3 if you are aggressive
-Short tomorrow if the price fall (waiting conformation)
-Long if price goes upper 20 and would hold at list 1-2days from this moment
Surpassingly, in q1 2020 it showed promising results with earnings equal to 76.2m USD and profit margin at 1.2%. Such a move was fuelled by online sales improvement and inflation fears across world.
However, in q3 2020 the enterprise has dropped 1B USD in revenue (6.14 vs 5.08) and earnings decreased by about 230m USD (72.6 vs -160.2). Moreover, today SIG has the highest Debt/Equity Ratio equal to 86.9% (the second worst number in the company's history 60.2%).
So let's start by considering these facts. While SIG is planning to become profitable in 3 years, its' financial results are not showing the same.
On the other hand, technical analysis shows that it has many reasons to grow:
1.The price started the rally at the end of March and still holding rising channel.
2.The price broke medium-term falling channel yesterday.
3. The price has consolidated at support level of long-term decreasing channel.
4.RSI indicate further uptrend and set at support level of the triangle.
5. EMA 21 is at support level of long-term decreasing channel and EMA 50 is below rising channel.
On the other hand:
1. The last candle looks like Evening Doji star
2.RSI looks so strong for this stock. If such a trend is supported by fundamental I am ok with it. However, I can find non.
Hence, stay focus. I would recommend:
-Short from 20-20.3 if you are aggressive
-Short tomorrow if the price fall (waiting conformation)
-Long if price goes upper 20 and would hold at list 1-2days from this moment