You Ask, We Analyze: What To Watch For With Naked Brand Stock

On Sept. 9, Benzinga asked its followers on Twitter Inc TWTR to name a stock they still haven’t given up on. From the replies, Benzinga selected one ticker for technical analysis. @Someone748, @KnishMr and @UoKrlp are “never gonna give up” on Naked Brand Group Ltd NAKD.

In January, Naked Brand was the target of a massive short squeeze along with GameStop Corp. GME and AMC Entertainment Holdings Inc AMC and shot up 868% over the course of just two days.

The ability for Naked Brand to squeeze shorts again is now relatively low because most shorts have already covered their positions.

At present Naked Brand has relatively low short interest with just 4.87% of its 740.55 million share float held short, although the number of shares held short has increased to 44.18 million from 39.62 million in August. The number doesn’t account for shares that are held by naked shorts.

See Also: How to Buy Naked Brand Group

The Naked Brand Chart: Naked Brands created a quadruple bottom pattern between Aug. 16 and Aug. 19 before shooting up over 50% higher to an Aug. 26 high of 77 cents. The stock then began a long period of consolidation.

In its consolidation, Naked Brand settled into a bullish falling wedge pattern on the daily chart, making lower highs and lower lows while the daily trading range decreased.

Naked Brand’s stock will meet the apex of the wedge on Sept. 16 and is likely to break up bullishly from the pattern before the date.

Traders will want to watch for increasing volume on the break for confirmation the pattern was recognized.

Naked Brand is trading slightly below the eight-day and 21-day exponential moving averages (EMAs) but the eight-day EMA is trending above the 21-day, which indicates indecision. On Friday, the stock tried to regain the 200-day simple moving average as support but rejected and wicked from it, which indicates overall sentiment is slightly bearish.

• Bulls want to see big bullish volume come in a break Naked Brand up from the falling wedge formation which would allow the stock to regain support of all three moving averages. Above the 61-cent level there is resistance above at 72 cents and 85 cents.
• Bears want to see big bearish volume come in and drop Naked Brand’s stock down through the bottom descending trendline of the wedge which would negate the pattern. The stock has support below at 50 cents and the 34-cent mark.
  

Photo: Arturo Rivera via Unsplash