Shares of Abercrombie & Fitch Co. (ANF) are getting some love in 2013 after making a strong move in November of 2012 on the back of a fiscal first quarter earnings report that crushed analyst expectations. The earnings report sent the stock up more than 30 percent in one day (incidentally its biggest single-day percentage gain in its history) to begin a multi-month climb from around $30 to peak at a 52-week high of $52.21 in February.
Ever since cooling from those highs, the stock has been stuck in a channel that swing-traders love, making consistent bounces from around $45 up to $50 and back down again, yielding solid percentage gains to both call and put sides.
Take a look at the chart:
Is it ready to take out the topside of the short-term channel and challenge the 52-week high. Some analysts think so and little technical resistance supports their fundamental claims.
In January, Zacks Investment Research upgraded New Albany, Ohio-based Abercrombie & Fitch Co. (ANF) to a “strong buy,” citing rising earnings estimates. BMO Capital Markets also boosted their rating from “market perform” to “outperform,” while raising their price target from $44 to $61. Early this month, analysts at Brean Murray upgraded the trendy teen apparel retailer to “buy” and set a $65 price target on Abercrombie (shares were about $46 at that time). Brean Murray said that now is the time to get “more aggressive” on Abercrombie with their upgrade.
This was despite ANF offering a weaker-than-expected guidance for fiscal 2013 and predicting a first-quarter net loss. Earlier this month, the company said that it is focusing on simplifying its operations and on international expansion, with flagship brand stores to be opened in Seoul and Shanghai and its Hollister stores slated for 20 new international locations.
On Monday, analysts at Macquarie Group chimed-in with an upgrade of Abercrombie from “neutral” to “outperform,” while setting their 12-month price target at $63 per share.
From a technical perspective, ANF is going to have to take out $50 and break the channel it has crafted in recent months. Odds are that, barring any unsettling news, the stock will look to make a new yearly high should the $50 mark fall.
Beyond that, it takes zooming out to a much wider chart to see what lies ahead from a technical perspective. Resistance will be scattered with the area of $56 certainly going to pose a challenge. Top-end resistance won’t come again, though, until the stock is pushing to make all-time highs, which currently sits at $78.05 in September 2007 and $76.05 in June 2011.
In Monday trading, shares of ANF are up by 2.3 percent at $49.53 with about 2 hours left in the regular session.