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Wednesday
Jul272011

Watching Skechers After The Close

We have been watching $SKX for a little while and recently decided to take a small trading position.  Just a little over a year ago, $SKX was trading in the $40 range.  Since then, due to a bloated “Shape-Ups” inventory and the research that proved that, surprise, they don’t work if you are just sitting on the couch, it traded down dramatically, to the current level of $14.88.

As you can see from the chart, $SKX is extremely volatile with several wild price swings in its history.  We think its current valuation is  low, particularly given its low debt and solid revenues.

Recently Michael Moore analyzed the stock price in his blog.  His research shows that the stock may be underappreciated based on the current Zscore.

Turning to the short-term chart, SKX is in a downward trend.

 

After $SKX reported earnings in late April, the stock traded down from above $20 to under $14 just a few weeks later.  We think the stock is ready for another big move.  The earnings report due out after the close today just may be the catalyst the stock needs to break out of its current range.  Competitors $CROX and $NKE also report tonight and $DECK tomorrow afternoon. The stock is not a good investment vehicle but it offers plenty of trading opportunities. There is no need to hurry on this one, we think the price action after the company reports earning might provide a clue about the next big move.

Written by Jennifer Galperin. Follow me on Twitter and StockTwits.

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