Abercrombie & Fitch Stock Issues Long-Term Buy Signal

Shares of the out-of-style trend-setter Abercrombie & Fitch Co. have gained more than 35% in the past two sessions after the company beat third quarter earnings and revenue estimates while guiding fourth quarter sales toward the high end of expectations. Covering short sellers – who had been banking on the troubled retailer continuing a nearly unbroken string of quarterly shortfalls – have provided most of the rocket fuel for this uptick.

Current technical positioning predicts that it is not the right time to jump in and buy the stock, despite the short-term euphoria and long-term buying signals. The rally posted a 52-week high in the upper teens but has now reached steep resistance at 18-month support, broken in October 2015. This formidable barrier should trigger a reversal in the coming days, generating a pullback that could fill the gap between $12 and $15 while offering a lower-risk buying opportunity. (See also: Abercrombie Sales Easily Top Wall St. Estimates; Shares Soar.)

Abercrombie & Fitch stock has squeezed short sellers since beating estimates last week and should post higher prices into 2018. …read more

Read more here: Abercrombie & Fitch Stock Issues Long-Term Buy Signal

Category: ANF

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