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Michael Michaud
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Michael Michaud is the founder of Invest2Success.com (http://www.invest2success.com/) and the Invest2Success Blog (http://invest2success.blogspot.com/). He has been investing and trading in the financial markets since 1989. He founded Invest2Success.com to empower individual institutional... More
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  • Selling Hanes Underwear 0 comments
    Feb 8, 2010 8:46 AM | about stocks: HBI, LB, MFB, VFC, RL, GIL, PVH, LULU, SGC, APP, EVK, TRLG
    This Market Week Ahead

    First, the current stock sell-off is going to continue in my opinion. The big buzzword currently in Washington DC and the markets is jobs and the lack of them. Last Friday I like what Art Cashin of UBS said. “It’s all about the dollar. Yesterday was basically a global margin call,” Cashin told CNBC. I see the dollar continuing higher and all commodities peaked out heading lower with stocks for awhile, possibly for a year or so. Global economies are slowing for a variety of specific country to country reasons, and the bottom line means commodities and stocks cannot sustain their prices right now. We’ll talk about hyperinflation later, but it’s not here yet, so it’s deflation that showing its real self now in my opinion.

    Major Global Economic Data Reports This Week

    Monday: Switzerland Unemployment and Retail Sales. Canada Housing. UK House Prices and Retail Sales. Australia Business Confidence

    Tuesday: Germany Consumer Price Index. UK Gross Domestic Products.

    Wednesday: UK Bank of England Quarterly Inflation Report. Australia Unemployment.

    Thursday: European Central Bank Publishes Monthly Report. USA Retail Sales.

    Friday: France and Euro-Zone Gross Domestic Product. USA U. of Michigan Confidence Survey

    My Stock Pick This Week

    Is a clothes company with a PE ratio of 40 or so. For the full year, they earned $51.3 million, or 54 cents per share, compared with $127 million, or $1.34 per share, in the year that ended in January 2009. Their EPS is getting hit hard now. If their EPS keep decreasing at this rate, the stock price looks like it could be headed much lower. Its revenue fell 8.4 percent from $4.25 billion last year to $3.89 billion in the year that ended Jan. 2 this year. Look at the stock chart below. The 3rd wave of the downtrend it’s in right now, is normally the biggest trend of the 5 waves in Elliottwave forecasting. I’m betting this 3rd wave is not over yet and is ready to test my trade plan take profit area supports to the 13 area and longer term possibly to 10 or lower. In case it doesn’t, stick to the stop-loss target to get out.

    Sell HanesBrands – Ticker HBI

    Sell Entry: 22.45 to 20.95

    Stop-Loss: 24.21

    Take Profit Areas: 18.06 to 17.80, 13.83 to 13.63, 10 and Lower

    Hanesbrands Company Profile

    Hanesbrands Inc., a consumer goods company, engages in the design, manufacture, sourcing, and sale of apparel essentials for men, women, and children in the United States and internationally. Its product portfolio includes t-shirts, bras, panties, mens and kids underwear, socks, hosiery, casualwear, activewear, socks, and hosiery. The company offers its products under the Hanes, Champion, C9 by Champion, Playtex, Bali, Leggs, Just My Size, barely there, Wonderbra, Stedman, Outer Banks, Zorba, Rinbros, and Duofold brand names. Hanesbrands also licenses its Champion brand name for collegiate apparel and footwear. The company sells its products through various distribution channels, including mass merchants, national chains and department stores, direct to consumers, and other retail channels, such as embellishers, specialty retailers, warehouse clubs, and sporting goods stores. As of January 3, 2009, it operated 213 outlet stores. The company is headquartered in Winston-Salem, North Carolina. Hanesbrands Inc. operates independently of Sara Lee Corp. as of September 5, 2006.

    Click here to review and trial the Trading Software we used in determining our sell short position on HBI.

    Click the Hanesbrand Stock Chart for a larger view.

    Hanesbrand Stock Chart


    Disclosure: Disclosue: No Positions. Going Short Based On Trade Plan Above
    Themes: consumer, goods, textiles, apparel Stocks: HBI, LB, MFB, VFC, RL, GIL, PVH, LULU, SGC, APP, EVK, TRLG
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