Bull & Bear: Skechers U.S.A.

Shares of Skechers U.S.A. SKX are trading lower on the session by 2.26%, at $17.72. With shares hovering just above its 42-week low, you have to wonder where they are heading next… Bulls: Bulls have not had a lot to hand their hats on over the past few months, but they will note that Skechers U.S.A. looks to be in the middle stages of large, sweeping bottoming pattern, which has the potential for a multi-year move higher. The ultimate price target of this multi-year pattern would be near $32.00, an 80% gain. Bulls will also note that shares are nearing the oversold level. The 16.25% short interest can also provide fuel to a rally in the name. A bullish trader could buy the January 2012 $17.50/15.00 risk reversal (long call, short put) for a net debit of $1.45. Bears: Bears will note that Skechers U.S.A. has been sold on any major rally; there is no reason to believe that this trend will not continue considering all the strong technical resistance levels that have formed. Bears will also note that the 20-day, 50-day, and 200-day moving averages are all downward-sloping. A break through the 52-week low could also incite technical selling, forcing shares toward the next support level, at $16.44. A bearish trader could buy the July $18/16 put spread for a net debit of $0.80. Skechers U.S.A., Inc. designs and markets Skechers-branded contemporary footwear for men, women and children under several lines. addition to Skechers-branded lines, the company also offers several designer, fashion and street-focused footwear lines for men, women and children. These lines are branded and marketed separately from Skechers and appeal to specific audiences. Its brands are sold through department stores, specialty stores, athletic retailers, and boutiques as well as catalog and Internet retailers. Along with wholesale distribution, its footwear is available at its e-commerce Website and its own retail stores. Skechers operates 90 concept stores, 92 factory outlet stores and 37 warehouse outlet stores in the United States, and 22 concept stores and five factory outlets internationally.