Under Armour (NYSE: UAA) traded lower on Tuesday, after hitting resistance slightly below the 24.35 resistance barrier. The dip resulted in the break of the upside support line drawn from the low of July 19th, and thus we will now abandon the bullish case. However, we will not turn bearish yet either, as a dip below 22.50 may be the reversal signal.
Such a break could confirm the completion of a failure swing top reversal formation and may encourage declines towards the 21.40 territory, which is marked by the inside swing high of July 12th. If that zone is also broken, then we could see a test at around 20.80, where another break may extend the fall towards the 19.85 barrier, defined as a support by the low of July 28th.
Looking at our short-term oscillators, we see that the RSI lies below 50 and points down again, while the MACD runs below both its zero and trigger lines, pointing down as well. Both indicators detect strong downside speed and increase the chances for the stock to complete the failure swing top formation in the not-too-distant future.
The outlook may turn positive again if investors decide to jump in and push the action above 24.35. The stock will return above the aforementioned upside line and may advance towards the 26.00 area, which stopped the share price from drifting higher between August 10th and 12th, or the 26.45 territory, marked by the peak of May 5th. If neither obstacle is able to halt the advance, then the next stop may be at 27.75, the high of July 24th, 2019.
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