On last trading session i.e 23 August, 2023, the ANF stock price opened with a huge gap after the release of second quarter financial results. The stock price surged roughly 23.54% in a single day, rising from the low of $40.50.
The bullish rally for ANF stock price was ignited after the release of first quarter financial report during the end of May this year. The share price surged from $22.50 and created a annual high at $51.90 in the last trading session.
If the next candle is successful in breaking the high of last candle, it might head toward the next resistance level of $54.50. There is high possibility that price might consolidate before making major moves due to strong spike occurred on 23 August, 2023.
On the other hand, if bears push price below the low of last candle, it might fill the gap and head toward $44.
Reason Behind The Surge
The retailer successfully crushed the consensus estimate of revenue and earning per share. The consensus estimated the revenue to be $844.075 Million while the company reported total revenue of $935.345 Million, a surprise of $91.27 Million (10.81%).
The earning per share was estimated to be $0.171 while Abercrombie reported $1.10, a surprise of $0.929 (542.97%). The company also raised its full-year sales growth guidance as the revenue improved across all regions, channels and brands.
The retailers now expects an increase of 10% in 2023, up from previous expectation of 2-4%. The operating margin range is set to be 8% to 9% from the prior projection of 5% to 6%. Abercrombie brand sales have spiked by 26% while hollister gained 8%.
Will ANF Stock Continue Rising?
The 20-day is acting a support for the price while it trades above 20,50,100 and 200-day exponential moving averages, indicating bullish momentum. Chaikin money flow score is 0.17 suggesting strength in the market.
The relative strength index entered into the overbought zone and stands at 79.32 implying chances of bearish short term pullback. ANF stock has crossed above upper band of bollinger which also indicates possibility of pullback and reversal.
Conclusion
The market structure and price action of Abercrombie and Fitch stock is highly bullish after the release of second quarter financial results. The apparel retailer crushed the estimates of revenue and earnings per share.
The company has also lifted the sales growth guidance as well as operating margin guidance for 2023. RSI and Bollinger bands suggest possibility of short term pullback.
Technical Levels
- Major support: $36 and $39
- Major resistance: $54.50 and $60
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2023/08/24/abercrombie-up-23-54-highest-close-in-a-decade/