Estee Lauder Stock Reversal: Significant or Superficial?

10/09/2015 7:00 am EST

Focus: STOCKS

Gregory Harmon, CMT

Founder and President, Dragonfly Capital Management

Greg Harmon, of Dragonfly Capital, takes a technical look at the stock of this high end cosmetic company—which started to move up last week after a period of sideways action—to determine if indicators seem to suggest the stock may continue higher over the short-term.

Estee Lauder (EL) started 2015 off with a bang. The stock moved higher in February and then just continued to trend higher for the next six months. Then the market sentiment changed and it sold off with the broad market. The bounce in the market that followed was not see in Estee Lauder though. Its price just continued to move sideways.

But then it did start to move up last week, ending over the 200-day SMA for the first time since August 20. It has held over that level, consolidating since. Thursday looks to print a bullish candlestick though. And it has support to continue higher from the rising RSI and MACD. The Bollinger Bands are also opened to the upside.

chart
Click to Enlarge

Finally, the Andrews Pitchfork shows a move up off of the lower median line and now a clear path to the median line above. A break of this consolidation would trigger a target from a measured move higher to about 89. This would be just over the median line were it to happen in a just a day or two.

By Greg Harmon of Dragonfly Capital

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