Is a Breakout in the Charts for The Children's Place?
Shares of Children's Place Inc. (PLCE) were trending higher since September, but the stock has recently been hitting a resistance line. If the stock b...
Shares of Children's Place Inc. (PLCE) were trending higher since September, but the stock has recently been hitting a resistance line. If the stock breaks through this level, a breakout could soon occur. Read more to learn how to profit from this trade.
Children's Place Inc. (PLCE) is a specialty retailer that sells accessories, footwear, and other items for children. The company has over a thousand stores in North America and also sells through its website and wholesale. It reaches more than a dozen other countries, with franchise partners operating stores, shops, or e-commerce sites.
The company has undertaken growth efforts such as enhancing its digital capabilities, augmenting its supply chain, and improving its financial flexibility. PLCE had a strong first-quarter, driven by a favorable response towards its product assortment, higher price realization, and consumers spending stimulus checks.
From a liquidity standpoint, the company has a current ratio of 0.9, which indicates it may not be able to cover short-term obligations. In addition, the company has a high debt-to-equity ratio of 4.1.
While PLCE had a strong first quarter, revenue growth has essentially been flat over the past five years, while earnings have fallen an average of 17.7% per year over the same period. However, analysts forecast earnings to surge 120.9% year over year in the current quarter.
The stock appears fairly valued with a forward P/E of 20.66. The stock was trending higher since September, but has shown mixed performance recently as shown in the chart below.
Take a look at the 1-year chart of PLCE below with added notations:
Chart of PLCE provided by TradingView
PLCE has been in a clear trend higher during the past year, but the stock has recently struggled to get past the $100 resistance (red), which is also the 52-week high. That mark is also preventing the stock from hitting new highs. PLCE looks to be dropping back, which may mean another test of the key level at $85 (green).
The possible long position on the stock would be on a breakout above the $100 resistance level which is also the 52-week high.
Want to Discover More Great Trades?
I have explored virtually every flavor of technical analysis and chart pattern known to mankind. The sad fact is that the vast majority of them don’t work at all.
That is why I recently put together this special report to help investors focus on the only 5 chart patterns that matter…the ones that lead to the most timely and profitable stock trades. Click below to get your copy now!
Have a good trading day!
Christian Tharp, CMT
PLCE shares were trading at $87.96 per share on Thursday morning, down $2.13 (-2.36%). Year-to-date, PLCE has gained 75.57%, versus a 17.03% rise in the benchmark S&P 500 index during the same period.
About the Author: Christian Tharp
I am an expert stock market coach having helped over 4000 beginner and advanced traders & investors from around the world take control of their financial futures. I also write stock market related articles for the Adam Mesh Trading Group and Yolo Publishing.Is a Breakout in the Charts for The Children's Place? appeared first on StockNews.com
Entrepreneur Editors' Picks
Crypto Doesn't Have to Be Serious. Just Ask This Comedian Who Organized a Conference About Failure in the Industry.
Want to Succeed? Turn Your Fixed Mindset Into a Growth Mindset.
Google's CEO Is Asking Employees 3 Simple Questions to Boost Productivity
'Greatest Storyteller Wins.' Katy Perry on the Surprising Link Between Pop Stardom and Entrepreneurship.
The 5 Personalities You Meet in a Coworking Space
'Man's Best Friend' — and Investment: The Thriving Industry of Pet-Related Franchising