Under Armour (UA)

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Under Armour

• Nearest Resistance: $43
• Nearest Support: $38
• Catalyst: Analyst Downgrade

Athletic apparel stock Under Armour  (UA - Get Report)  is continuing a multi-day selloff this afternoon, shedding another 6.3% on big volume following news of two management departures as well as a downgrade from Brean Capital. Under Armour is losing its chief merchandising officer and chief digital officer, part of the reason behind Brean's decision cut Under Armour to a hold.

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Technically speaking, today's session appears to be the final straw in this stock's price trend. Shares are violating the lower-end of its uptrend this afternoon, ending a trend that had been in place for nearly all of 2016. From here, Under Armour could slide further this month before it catches a meaningful support level.

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The breakdown of the trendline is holding, the stock is down further at $38.50

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Is Under Armour Stock Approaching Oversold Levels?

By Justin Kuepper | September 1, 2017 — 10:22 AM EDT

Under Armour, Inc. (UAA) shares have fallen nearly 45% this year as the company deals with slowing demand for sporting and "ath-leisure" apparel as well as issues with its branding efforts in the NBA category. Management remains confident that it can restructure the business with a customer-led approach and focus on digital sales, but the market remains skeptical about its ability to execute given the lower guidance issued this year.

Under Armour Inc

UAA

16.37

+1.36%hares have fallen nearly 45% this year as the company deals with slowing demand for sporting and "ath-leisure" apparel as well as issues with its branding efforts in the NBA category. Management remains confident that it can restructure the business with a customer-led approach and focus on digital sales, but the market remains skeptical about its ability to execute given the lower guidance issued this year.

In late January, Under Armour stock fell almost 20% lower after fourth quarter results failed to meet expectations. Revenue increased 12% to $1.31 billion – falling $100 million short of consensus estimates – while earnings per share of 23 cents missed estimates by two cents per share. Since then, the stock has continued to slide despite improving performance, as retailers Foot Locker, Inc. (FL) and The Finish Line, Inc. (FINL) have lowered their guidance for the coming quarters. (See also: Nike, Under Armour Shares Slip on Adidas Pressure.)

Follow us: Investopedia on Facebook) have lowered their guidance for the coming quarters. (See also: Nike, Under Armour Shares Slip on Adidas Pressure.)

From a technical standpoint, the stock experienced a brief rally in late August before failing to break through S2 resistance at $17.26 and reaching fresh lows. The positive news for Under Armour is that the relative strength index (RSI) is very oversold at 27.52, which suggests that the stock could see some near-term consolidation. The moving average convergence divergence (MACD) continues to trend lower, but the rate of decline appears to be moderating.

Traders should watch for some near-term consolidation at around $16.00 to $17.00. A breakout from S2 resistance levels at $17.26 could point to a longer-term recovery, but a failure to break out from these levels could lead to more downside ahead. The market may have already priced in a lot of the bad news surrounding the company, which means that traders should watch for a potential relief rally in the near term. (For more, see: Under Armour Stock Price Not Likely to Double.)