Selected Article

L Brands - the week's top S&P500 Performer

by Tim Straiton
Saturday 21st November 2020

L Brands closed the week ending November 20th at $39.97, up almost 14% by outbeating 3rd quarter earnings estimates. The company posted earnings of $330.6 million, or $1.17 per share, compared with a loss of $252 million or 0.91 cents per share in the 3rd quarter of 2019. The earnings surprise was attributed to a 55% increase in sales of personal-hygiene products which helped offset lagging sales in clothing and lingerie.

The technical outlook for this stock changed much to the better already in July this year when it broke above its descending trend channel and at the same time traded above its 40 week moving average with high volume. The decision by management to close a quarter of its North Amercican retail outlets was in part responsible for this dramatic turn-around.

L Brands is trading at 44.75% above its 40 week moving average and the 14 week relative strength index is at 75% which puts it in overbought territory. Resistance can be expected at 42.02 which is the Fibonacci 38.2% retracement from the low of $ 8.00, based on the entire 97.08 - 8.00 range.


 

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