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Under Armour Inc. (UAA) - Bulls Take Charge after Earnings Beat Expectations

Under Armour Inc. $UAA has been choppy, but appears to be confirming a price bottom as price rose sharply during the 2/12 session after the release of Q4 earnings, which beat expectations.

Here's a report from CNBC:

Under Armour earned 9 cents per share on an adjusted basis during the fourth quarter, topping analyst expectations of 4 cents per share, according to average estimates compiled by Refinitiv.

Sales rose 1.5 percent to $1.39 billion, ahead of expectations for $1.38 billion.

Under Armour said U.S. sales fell 6 percent from the previous year to $965 million during the fourth quarter, while international sales climbed 28 percent, after adjusting for fluctuations in foreign exchange rates, to $395 million and now account for 28 percent of its total revenue.

It said apparel sales were up 2 percent, fueled by its training business. Footwear sales were down 4 percent, as Under Armour said it sold fewer shoes in discount stores during the holiday period. Accessories sales declined 2 percent.

The retailer didn't make any changes to its outlook for 2019, which it originally laid out in December.


Let's take a look at the price action:

UAA Daily Chart

(click to enlarge)

Choppy and Bullish:
- The daily chart shows us that price action has been choppy but mostly bullish since late 2017 when the market support UAA at $11.50 per share.
- It has since made a high around $24.70, which remains the key resistance against a truly bullish development.
- Otherwise, UAA has been simply bullish within consolidation.

Bullish Signs:
- The fact that price held above $16.50 back in December was a sign that bulls are resilient in this market. After all, this suggests the market respected a rising trendline.
- Then price came back up towards $20, and stalled around here for a bit.
- Then, the 2/12 session bullish engulfing candle signaled that bulls are indeed taking over. 
- When we look at the weekly chart, we can see that the weekly RSI has pushed above 70, and has since held above 40. This is a sign that the bullish momentum from 2017-2018 is still in play.
- I think there could be upside towards the $28-$30 area in the medium-term (next couple of months). 
- At this point, I would love to pick UAA up around $21.50 and $18.50. 
- Note that price is also challenged by a bearish trendline.
- A break above $23 would likely clear this trendline, and open up the bullish scenario.

UAA Weekly Chart

(click to enlarge)

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