The retail sector has certainly provided the stock market with its fair share of ups and downs. As fickle as the consumer is, we have seen some names take off over the past few months while others have been saddled with weaker margins, little guidance, complaints about a stronger dollar, and just plain lousy inventory.
Well, that cannot be said for Restoration Hardware (RH), an upscale furniture retailer with a strong presence in the country’s top shopping destinations. Restoration Hardware is the envy of some larger retailers, thanks to their strong sales and high margins. During the last quarter, they posted robust earnings, and it paid off for investors – the stock jumped.
The technical picture might not look that promising at first glance, but with their next earnings report on the horizon, the Restoration Hardware story may start to get better. The chart shows that the stock just turned higher from a mild consolidation off all-time highs. Instead of jumping the gun, I watched it for confirmation that was moving up rather than sideways, and the confirmation is now in place.
Additionally, the MACD buy signal is strong and the stock has solid relative strength. When Restoration Hardware releases Q4 earnings in a couple of weeks, it will include Christmas sales, which have been pretty decent for high-end retailers.
Right now, the stock is just above its November high, so for a trade, I’ll be looking at the April 90 call strike.
Take a look at the chart and watch the video below to get more insights on Restoration Hardware.
Restoration Hardware Chart Analysis
Take a deeper dive into the chart action and learn how to read the technicals as I walk you through the Restoration Hardware stock (NYSE: RH) and my analysis.
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*Image courtesy of Architectural Digest.