Tuesday, May 31, 2011

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

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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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