Quick CROX Update

Crocs Inc. (NASDAQ: CROX): Here we see a 5-day chart with hourly candlesticks and two overlays, the 20-bar EMA in purple and the Cubes (AMEX: QQQQ) performance in green. See the continuation of this post for a few observations about the chart and the market:

(1) pattern of large up moves, usually at the open (except for the Cramer pop that came at 3:30 PM last Thursday), (2) pattern of working off those large up moves through mostly quiet and low volume corrections to the 20-bar EMA, (3) pattern of CROX outperforming the Cubes, currently by about 6% over the past five days, and (4) pattern of the Cubes (and most of the market) exhibiting distribution, including possible stealth distribution. Points 1-3 are interesting and positive to the long side of the story. Point 4 is possibly quite negative for any long equity investments, at least those with positive correlations to the market, which is at least 75% of them.

What’s it mean? It means that I am still looking for a significant earnings positive surprise when CROX announces it first-ever quarterly results as a public company, which it’s expected to do in the next week, possibly as soon as Friday unless the auditors need a few extra days to make sure everything is ship shape for the big début. BUT, it also means that market risk is high right now and that negative seasonals may begin to exert themselves (“sell in May and go away” until the fall low, when there is usually at least a nice trading rally). We’ll see. Cheers!

Index of my recent CROX postings
Crocs on Amazon.com

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