Crocs Stepping Up, Shows Strength Compared To General Market: A Technical Analysis

Crocs, Inc CROX was popping up about 2% higher on Monday despite the S&P 500 edging slightly lower ahead of big-tech earnings kicking off this week with Netflix and Tesla reporting earnings.

The shoes-with-holes maker has been trading in a strong uptrend within a rising channel pattern since March 15. The pattern is bullish for the short term, but can be bearish down the road.

For bullish traders, the "trend is your friend" (until it's not) and the stock is likely to continue upwards. Aggressive traders may decide to buy the stock at the lower trendline and exit the trade at the upper trendline.

Bearish traders will want to watch for a break-down from the lower ascending trendline, on high volume, for an entry. When a stock breaks down from an ascending channel, it's a powerful reversal signal and indicates a longer-term downtrend is likely in the cards.

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The Crocs Chart: On Monday, Crocs attempted to break up from the ascending channel, but failed and wicked from the upper trendline. This indicates the local top may have occurred and Crocs will retrace, possibly to print a higher low at the lower trendline of the pattern.

• Crocs was working to print a shooting star candlestick, which also suggests the higher high has occurred, and a decline is in the cards for Tuesday. Crocs’ move higher was also on lower-than-average volume, which indicates the bulls may be becoming exhausted.
• The stock’s most recent higher low within its uptrend was printed on April 6 at $119.61 and the most recent confirmed higher high was formed at the $130.80 mark on March 31. If Crocs falls lower over the next few trading days, bullish traders can watch for the stock to print a reversal candlestick above $120.
• Bearish traders want to see big bearish volume come in and break Crocs down from the rising channel pattern.
• Crocs has resistance above at $145.37 and $157.80 and support below at $135.67 and $126.33.

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