TBI's Thoughts [19]: Elf Beauty (NYSE: ELF)... A Beauty?

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e.l.f. Beauty, Inc. (NYSE: ELF)

ELF’s monthly chart is a sight to behold - it has been forming higher highs and higher lows since forming a bottom in 2019. Despite the short report by Muddy Waters Research alleging overstated revenues and other fraudulent transactions, the monthly Stochastic saw a bullish crossover after Nov’s close - the first since Dec’23. Nov also saw the largest volume in the stock’s history.

The weekly chart closed with a low-volume doji after an extremely high volume hammer candle the week before. This is suggestive of consolidation before a continuation of the move up. ELF also broke out of the Jul’24 resistance trendline (in red). The weekly Stochastic is bullish, and continues to push into extreme overbought territory.

That being said, the daily presents a potential head and shoulders setup with shoulders at 139.85 (prior resistance) and the head at the 221.83 ATH. ELF has to break and turn 139.85 into support to invalidate the head and shoulder pattern and fill the 162-167 and 169-182 gaps. The daily oscillator is in the process of resetting to the downside, as it moves back into extreme oversold levels.

My risk for any longs on this name is a breakdown below 94.53, which could see reversion back into long-term trend support. Otherwise, a break above 139.85 will open the floodgates to new ATHs over a multi-year timeframe.

Dawn.

Upside PT: 182.10

Invalidation: Close below 94.53

$e.l.f. Beauty Inc.(ELF)$ $Deckers Outdoor(DECK)$ $On Holding AG(ONON)$ $Nike(NKE)$ $adidas AG(ADDYY)$

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