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Fan Yang

Under Armour (UAA) Retreats, Approaching Key Support Levels

Under Armour has been rallying since finding support above a key support pivot around $11.10 a share. Price came up to almost $25.00 in June, but has since flattened and even dipped. As we can see on the daily chart below, the dip has brought price back near a rising channel support. 

UAA Daily Chart

(click to enlarge)

The 2 Scenarios:
- Price action has come to a crossroad.
- Let's first talk about the bullish case:
- Price has come up above the 200-, 100-, and 50-day simple moving averages (SMAs). 
- There was also a price bottom after price broke above the key support/resistance pivot around $18.40. 
- I think as long as price can hold above this level, the market is bullish.
- Also note that the RSI has pushed above 70, and held above 40 after a pullback. This reflects development of bullish momentum.
- In this bullish scenario, we have upside towards the $30 mark. 
- What about the bearish case?
- There was a large price top formed in 2015-2016. Price action has been bearish since hitting a high around $53 in 2015. 
- Price is now still under a falling trendline. 
- The rising channel, could simply be a flag pattern.
- A break below $18 could signal a bearish continuation back towards the $11-$11.10 support area. 
- A break below $11 might extend the bearish outlook, but for now, I think we should limit any bearish outlook to the $11 area. 

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