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Fast Fashion - The Trend Is Here To Stay, Positioning Ahead Of Santa Claus Rally

Background

· The rise of Fast Fashion has propel some of the listed companies into global giants and the trend looks set to stay.

· The low selling price of fast fashion is thus not restricted to seasonal trends and their display is changed almost fortnightly instead of every quarter; and consumers are willing and able to revamp their wardrobe regularly.

· Focus on fast fashion brands which are benefitting from their depreciating base currencies (e.g. JPY, EUR) with substantial % of their earnings coming from region out of their home presence.

· 3 counters that might be interesting: Adidas, Fast Retailing (think Uniqlo) & Inditex (Think Zara)

· Adidas (70% of Revenue from Outside Western Europe), Inditex (40% of Revenue outside Europe)

Equity solutions

· From a technical perspective, they are bouncing off their long term lower boundary channel which might prove to be good levels for accumulation ahead of the Santa Claus Rally.

· From a structured solutions perspective, the 3 counters have high vols (20s to 30s) which might present attractive pricing parameters.