Under Armour (NYSE: UAA) opened with a positive gap on Monday, above the short-term downside resistance line drawn from the high of May 27th. Yesterday, the stock opened with another positive gap, bigger this time, and managed to overcome the peak of June 25th, at around 22.30. In our view, this has turned the short-term picture back to positive and thus, we would see decent chances for further advances.
We would expect the stock to challenge the 23.25 barrier soon, which provided resistance between May 12th and June 1st, and if investors are willing to overcome it, then we may see them climbing towards the 24.74 zone, marked by the high of April 30th. Another break, above 24.74, could extend the recovery towards the peak of May 5th, at around 26.45.
Shifting attention to our short-term oscillators, we see that the RSI moved above 70 and continues to point north, while the MACD lies above both its zero and trigger lines, pointing up as well. Both indicators detect strong upside speed and support the notion for further advances in this stock.
Now, in order to start examining whether investors have abandoned Under Armour, we would like to see a dip back below the aforementioned downside line, and even better, a break below the low of July 28th, at around 19.85. This could pave the way towards the 18.50 level, marked by the low of July 19th, the break of which could see scope for extensions towards the 17.13 barrier, marked by the low of January 27th.
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