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Croc’s And Deckers Are Forecasting A Tropical Winter

ByDanske Markets
AuthorGregory W. Harmon
Published 09/12/2012, 03:35 AM
Updated 05/14/2017, 06:45 AM
CROX
-1.92%
RSI
-1.08%
DECK
0.65%

A few weeks back on August 29th I took a look at Croc’s (CROX) and it still looks good and is in another bull flag. The last three candlesticks have been dojis and Tuesday’s a bearish Spinning Top. But with the Relative Strength Index (RSI) moving up and bullish and the Moving Average Convergence Divergence indicator (MACD) positive, the rest of the signs point higher.

Croc’s (CROX)
CROX
A move over 18.40 sees resistance next near 20. Another darling of the 2010 – 2011, Deckers Outdoor (DECK) looks quite the opposite though. After bouncing from a long 9 month run lower it is falling back again toward the low at 40. This chart is supportive of more downside with the SI trending lower and about to head into bearish territory and the MACD negative and growing.

Deckers Outdoor (DECK)
DECK
Each of these in their own right could be a lucrative trade but the pairs trade set up form the ratio chart below is very compelling. Breaking the descending triangle lower under a ratio of 2.50, with a RSI that is bearish and trending lower and a negative MACD it has a target on the triangle break of 1.50.

Trade: Buy 5 (CROX) and Sell 2 (DECK) with a stop at a ratio of 2.55 looking for a target of 1.50.
With CROX at about 18.25 and DECK near 45 the move could yield as much as $35 to $59 per pair. That buys a lot of shoes!
deck-crox
Disclaimer: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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