Two phrases traders haven’t heard in the same sentence much in 2017 are “retail stock” and “all-time high.” However, retail stock Childrens Place Inc PLCE 0.59% briefly made new all-time highs this week following a first-quarter earnings beat, but the celebration didn’t last long.
A Roller-Coaster Week
After peaking at a new all-time high of $125.30 on Monday, the stock sold off hard into the close. The negative momentum carried over to Tuesday and Wednesday as well, sending shares as low as $110.10. When the company reported a Q1 earnings and revenue beat on Thursday, the stock appeared poised to recoup its losses and break through to new highs. However, after opening within a dime of all-time highs on Thursday, the stock began retreating and never looked back. By Thursday’s close, Children’s Place was back in the red for the day, closing at its lowest price in about a month.
Staying Optimistic
On the surface, the post-earnings trading action seems particularly bearish. However, there are still reasons to be optimistic that the stock could be back making new highs within weeks. While the sell-off was disappointing for bulls, the stock remains above its $105.90 April low. As long as the post-earnings pullback stays above $105.90, it could simply be establishing the next in a series of higher lows as it churns higher.
In addition, bulls shouldn’t get too worked up about the post-earnings selling pressure. Prior to the earnings report, Children’s Place stock was…
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