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Technical Update - Luxury stocks at a turning point: Kering, LVMH and Richemont
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Résumé: Luxury goods companies are displaying signals of uptrend exhaustion and potential top and reversal patterns in their stock movements.
The recent profit warning issued by Kering, accompanied by a significant sell-off, might have a ripple effect across the luxury goods industry, potentially impacting other prominent companies such as LVMH and Richemont.
Kering, the parent company of luxury brands like Gucci and Saint Laurent, opened below the support level of 376.35 and is trading 13% lower, confirming downtrend.
This sell-off comes on the back of a rejection at 438.45 and a Gravestone Doji top and reversal pattern formed last week.
If Kering closes below 376.35, the next support is at around 346.10. A close below the January low of 343.40 could lead to a drop towards 313-293.
This sell-off comes on the back of a rejection at 438.45 and a Gravestone Doji top and reversal pattern formed last week.
If Kering closes below 376.35, the next support is at around 346.10. A close below the January low of 343.40 could lead to a drop towards 313-293.
Medium-term weekly chart Kering tried to establish an uptrend which is now demolished. If Kering closes below January trough at 343.40 there is no support until around 313-293.
To neutralize this bearish outlook, Kering needs to close above 376.35, and to reverse the trend, a close above 407 is essential.
LVMH is showing signs of trend exhaustion; The strength indicator RSI has been declining for the past few weeks indicating weakening uptrend momentum. With a Gravestone Doji top and reversal cnadle formed last week there is strong indciation the uptrend is set to reverse.
A close below 821.90 confirms a downtrend, potentially leading to a sell-off towards 782-765.
A bearish Engulfing candle on the weekly chart could reinforce this bearish perspective if LVMH closes this week below 838.80. To counteract this bearish scenario, LVMH must close above 886.40.
A close below 821.90 confirms a downtrend, potentially leading to a sell-off towards 782-765.
A bearish Engulfing candle on the weekly chart could reinforce this bearish perspective if LVMH closes this week below 838.80. To counteract this bearish scenario, LVMH must close above 886.40.
Richemont CFR displayed a Shooting Star top and reversal candle 14th March.
By closing yeseterday below 140.60 a bearish trend was established.
There is some support at around 130.45 but CFR could very well sell-off down to strong support at around 124.25
The RSI is still above 40 which suggests some positive sentiment, but a close below this level would indicate increased downside risk.
By closing yeseterday below 140.60 a bearish trend was established.
There is some support at around 130.45 but CFR could very well sell-off down to strong support at around 124.25
The RSI is still above 40 which suggests some positive sentiment, but a close below this level would indicate increased downside risk.
Medium-term weekly chart. Declining volume during the year to date bullish trend is illustrating the trend is fragile and is supporting the view of the uptrend being in exhaustive mode furhter adding to the bearish outlook.
To demolish this bearish picture a close above 140.60 is necessary
A description adn explanation of technical Indicators used in my analysis - not exhaustive
Technical analysis studies and indicators
Technical analysis studies and indicators