Tuesday, June 17, 2008

Steve Madden (SHOO)

Steve Madden, Ltd (SHOO) was a stock which I had trawled from one of my stock scans. It is showing some interesting form with Monday's doji just above the 20-day MA.

This action followed a retracement from the one-day surge triggered by positive earnings. Technicals are a little bit of a mixed bag with a fresh MACD 'sell' on a flatline on-balance-volume trend. Stochastics have also fallen out from overbought conditions - considered bearish. However, bull trend strength has improved sharply with the ADX at a healthy 31.74 [+DI > -DI]. Also positive was the bullish cross of the 200-day MA by the 20-day MA and the upcoming "Golden Cross" between the 200-day MA and 50-day MA.

The point-n-figure chart has a target of $27 from the May 30th double top breakout, but this will likely turn into a conservative target if it can clear $24 and complete a bullish head-and-shoulder reversal pattern, bringing the target closer to $34.

Options players shows a fair degree of open interest at the June $12.50 strike call. Those with a longer time frame get stuck on liquidity. The December $12.50 strike is listed at $9.20 from the ask but there is no liquidity until you get to the December $17.50 strike at $5.30 from the ask.

Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

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