Signal Says This Retail Stock's on Sale

ANF stock is heavily shorted

Feb 15, 2019 at 11:15 AM
facebook X logo linkedin

The shares of Abercrombie & Fitch Co. (NYSE:ANF) have been climbing higher since their Dec. 24 low at $16.65, and topped out at $22.67 earlier this week. The retail stock pulled back from this short-term peak on Tuesday following news denim company Levi Strauss filed for an initial public offering. ANF is now trading near a trendline that's had historically bullish implications, suggesting the equity could be headed on its next leg north.

Specifically, ANF is trading within one standard deviation of its 40-day moving average. According to Schaeffer's Senior Quantitative Analyst Rocky White, in the five times the stock has pulled back to this trendline in the past two years, it averaged a 10-day gain of 2.3%, with 80% of the returns positive. Widening the time frame out to 21 days yields an average post-signal return of 12.4%. Another move of this magnitude would put ANF near $23.84 -- a level not seen since a late-August bear gap -- based on its current perch at $21.21.

anf stock daily chart feb 15

A shift in sentiment could help fuel future upside for Abercrombie & Fitch stock. Short sellers have already started covering their massive bearish position, with short interest down 8.3% since its early December peak. Nevertheless, the 15.49 million shares currently sold short account for almost 24% of ANF's available float, or 9.2 days' worth of pent-up buying demand, at the average pace of trading.

Plus, all 12 analysts covering the retail stock maintain a "hold" or "worse" recommendation. Echoing this is the consensus 12-month ANF price target of $20.31, which is a discount to current trading levels. A round of upgrades and/or price-target hikes could draw more buyers to Abercrombie & Fitch's table.


Unlock Weekend Profits with Chris Prybal's Favorite Strategy Up +487.5% in 2024

With the markets going left, right, and sideways, you need to have a plan now more than ever. 

Expert Trader Chris Prybal is no stranger to volatility, and has mastered finding big stock rallies while other traders aren't looking over the weekend. Rallies that produced gains like +207% on RTX calls, +236% on MARA calls, and +238% on NET calls.

A few simple moves on Sunday at 7pm could be the “Secret Sauce” your portfolio needs to not just stay afloat, but make unprecedented gains in this turbulent market.

Don’t sit on the sidelines, beat the market with Chris Prybal's strategy. Join him now!




Rainmaker Ads CGI