Under Armour (NYSE:UA) has been in a rally mode since last Thursday, when it hit support near the crossroads of the $14.00 level and the upside support line drawn from the low of Sept. 22. That said, yesterday, the stock hit resistance near the $16.80 barrier and then, it retreated somewhat. As long as it is trading above the pre-mentioned upside line, we would see a positive picture, but we cannot rule out some further declines, before market participants jump back into the action.
A dip back below the $16.20 level, marked by the inside swing peak of Nov. 9, would confirm the case for a deeper retreat, perhaps opening the way towards the $15.20 level, marked by Monday’s low. Investors may decide to buy again near that zone and thereby push the price back up to the $16.80 hurdle. A break above that obstacle would confirm a forthcoming higher high and may set the stage for extensions towards the $17.50 area, marked by the highs of Feb. 11 and 12, or towards the $17.90 zone, which is the low of Dec. 3, 2019.
Shifting attention to our short-term oscillators, we see that the RSI has topped within its above-70 zone, and just touched its toe below 70, while the MACD, although above both its zero and trigger lines, shows signs of topping as well. Both indicators detect slowing upside speed and corroborate our view for some further retreat before the next positive leg.
In order to abandon the bullish case, we would like to see a dip below $14.00. The price would already be below the aforementioned upside line, while the move below $14.00 would confirm a forthcoming lower low. We may then see declines towards the lows of Oct. 28 and 29, at around $13.15, the break of which may extend the slide towards the low of Oct. 15, at $12.30.