THE stock breakout of June 2019 according to us should be Under Armour (UAA). It is a text book chart breakout combined with super strong fundamentals and financials published last month. It’s the type of combination we desire to see in order to get excited. It may qualify as one of the top opportunities for 2019.
First of all, let’s be clear that we don’t pick Under Armour as the breakout stock of the month just because JP Morgan upgraded it (source).
As per our 100 investing tips we ‘start with the chart’, always.
The chart of Under Armour’s stock price has a gorgeous setup:
- a series of higher lows;
- in the context of a giant rounding bottom;
- followed by a horizontal breakout;
The reason why we like this a lot, is not only because of the 3 conditions for success outlined above being present all combined, but also because of the time it took to complete this formation.
It took some 2.5 years for this chart setup to complete which means there is lots of bullish energy that can be unleashed now.
Moreovere, as explained in this article the company is fundamentally in great shape, with a great outlook combined with strongly improving financials.
This quote says a lot:
Under Armour said it now expects annual 2019 earnings to fall within a range of 33 to 34 cents per share, compared with a prior range of 31 to 33 cents. It’s still calling for revenues to be up roughly 3% to 4% overall, with sales growth remaining “relatively flat” in North America.
The circumstances are just right for Under Armour. Its chart lines up with financials and fundamentals (which includes outlook). A strong buy according to us.