Tuesday, May 31, 2011

Very Impressive Bounce by Polo Ralph Lauren (RL) as it "Fills the Gap" the Other Way

Last week, Polo Ralph Lauren (RL) was flattened by an earnings report which investors originally did not like (margin pressure and inventories the main culprits).  This selloff filled a 'gap' from early February to the downside.  Normally in these type of situations, the selling continues for a few days - I generally give it three days to allow the selling to wear off before sniffing around.  However, that was not the case with RL.  I believe the stock was upgraded the very next day which helped it hold the lowspol.  Friday it had a very nice bounce, and today it has filled the 'gap' again - but this time to the upside.  Quite a round trip... and an impressive movement!

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