Dallas, Texas 04/22/2014 (FINANCIALSTRENDS) – American Apparel Inc. (NYSEMKT:APP) trimmed down on Thursday after having lost a substantial amount on its previous day. The stock has been trading in a very narrow range with a significant amount of loss in the last week of March. The stock has now given a breakout with strong volumes which makes us believe that the stock might have entered a trend reversal pattern.
The stock is currently trading below its 50 day moving average which is at $0.70and 200 day moving average which is at $1.21, this implies the stock has been on a downward trend for a significant amount of time with weak upward momentum.
The technical indicators on the daily chart for American Apparel Inc. (NYSEMKT:APP), are in the oversold region with a curve indicating an upward momentum, the stock may see a trend reversal from the current levels if the indicators keep up with the upward curve and trade with good volumes. The relative strength index is near the oversold region but is currently flat, this implies the stock has a very weak upward momentum but a trend reversal can be seen in the future trading sessions if the relative strength index curves upwards.
American Apparel Inc. (NYSEMKT:APP) has very weak momentum on the upside with resistance at many levels, The first resistance level for the stock is around $0.59 levels and a close above this levels would open the window for $0.70 levels, the stock has strong its next resistance at this level $0.70 levels. On a bearish note the stock has a good support around $0.45 levels. The stock looks weak and could stay at the same levels in the near future or see further more downside
(Figure): Daily Chart for American Apparel Inc. (NYSEMKT:APP)
On April 10, 2014; American Apparel Inc. (NYSEMKT: APP)announced its annual sales; the figures suggested the sales remained flat against the previous year. Comparatively the sales decreased by 5%, the total sales were $137.8 million versus $138.1 million for the last year.