Stitch Fix Stock Cracks Support, Plummets

Stitch Fix Inc. SFIX shares were trading much lower Wednesday after the company reported its fiscal first-quarter 2022 financial results and issued guidance below estimates. The company reported a quarterly earnings loss of 2 cents per share, beating the estimate for a loss of 14 cents per share.

The company reported quarterly revenue of $581.2 million, beating the estimate of $570.95 million. Stitch Fix said it expects fiscal second-quarter net revenue to be in a range of $505 million to $520 million versus the analyst estimate of $584.7 million.

Stitch Fix was down 22.71% at $19.30 midday Wednesday.

See Also: Why Stitch Fix Shares Are Tumbling

Stitch Fix Daily Chart Analysis

• The stock looks to have recently fallen below the pattern support in what technical traders call a falling wedge pattern.
• Price has slowly been condensed between narrowing highs and lows that have a downward slope. The price was at the point of the pattern,  was unable to break above the resistance and fell below support.
• The stock trades below both the 50-day moving average (green) and the 200-day moving average (blue), indicating the stock has seen recent bearish sentiment.
• Each of these moving averages may hold as an area of resistance in the future.
• The Relative Strength Index (RSI) has been fading lower the past couple of months and now sits at 22 on the indicator. This is well into the oversold range and is showing that the selling pressure in the stock heavily outweighs the buying pressure.

What’s Next For Stitch Fix?

Bullish traders are looking to see the stock bounce back and start to push higher once again while forming higher lows. Bulls want to see the stock push back into the pattern and then break above pattern resistance, possibly seeing a breakout and a trend reversal.

Bearish traders are looking to see the stock continue to fall lower. Bears look to be in control of the stock as it has fallen below support and trades below both moving averages.