JD Sports Fashion plc engages in the retail of branded sports fashion and outdoor clothing, footwear, accessories and equipment for kids, women, and men. It operates through Sports Fashion and Outdoor segments. The company also retails leisure goods, as well as distributes sports apparel and accessories, footwear and apparel, and rugby apparel and accessories.
The daily price chart of JD. L is shown below using my normal layout showing data over the six months.
In the window just below the price, the blue study shows that forecast Earnings per share (EPS) is rising and this is the engine that’s been driving the share price upwards. Over the past year forecast EPS has risen from approximately 36p to 48p.
On VectorVest, the Relative Safety (known as RS) of the earnings stream is ranked as excellent.
The metric measuring long-term share price appreciation potential in relation to a AAA rated corporate bond (known as RV) is showing an excellent value. JD. L has a forecast Earnings Growth Rate (GRT) of 20% which VectorVest considers to be very good.
Technically, JD. L is trending strongly as measured by the proprietary VectorVest Comfort Index. The Comfort Index is an indicator which reflects a stocks ability to resist severe and or lengthy price declines. The Comfort Index is unique in investment research and a secret weapon.
As all reading will have noted, the UK market has been trending downwards and the advice on VectorVest has been not to buy shares. This remains the case as I write on the 7th of October 2021. A medium-term Market Timing system on VectorVest known as the DEW printed a Down signal on the 14th of September 2021 and VectorVest has been urging that traders sit on their hands from that date to present.
During the pullback of the overall UK market, JD. L has fallen in price and in the process charted a formation known by technically orientated traders as a “bull flag”. As its name implies the formation is very positive for JD. L when the overall market turns.
Also of note is that JD. L was accumulated on weakness at a former resistance level and in the process charted a positive “hammer” candle pattern at this level. This is again what technically orientated traders call “previous resistance becoming new support”.
In the bottom window of the above chart, a momentum indicator known as the “stochastic” is shown. The latter is presently in an oversold area and showing reverse divergence with the share price. This is strong technical evidence that the upward trend in JD. L is about to restart.
In summary, JD. L looks set to grow earnings strongly and safely over the next year plus deliver and grow its yet small dividend yield. The share has retraced and offers an excellent buy in level at around 10 pounds. Currently the share is on a Hold recommendation on VectorVest.
Traders and investors should wait for the share to break upwards and move back to a VectorVest Buy recommendation and the advice on the VectorVest Color Guard to indicate that it is safe to buy shares.
At present, the advice on VectorVest as I write on the morning of the 7th of October this is not the case, as seen below.
Traders should carefully stalk the share and wait for VectorVest Market Timing Gauge to indicate that’s it’s safe to buy stocks.
Once more doing nothing is much more difficult than it would seem I know.