I have waxed poetically about how much I like golf in the past -- some may even say that I am obsessed (like Tiger Woods' lawyers -- kidding). With the great city of Cincinnati finally wrapping up winter and seeing that bright glowing orb known as the sun, I can't help but think about getting out there on the links and destroying some landscaping.
One sure way to tell that golf season is right around the corner is when your local Dick's Sporting Goods (NYSE: DKS) starts touting itself as the golf headquarters. Well, guess what happened over the weekend? That's right, I saw my first golf commercial. My question is, will the start of golf season be enough to help the sports retailer put the recent downturn behind itself and push forward?
There can be no doubt that the recent downturn in the economy has beaten down and battered the retail sector, and DKS is no exception. On a weekly basis, the stock has descended steadily since 2007 -- wilting under pressure from its 10-, 20-, and 50-week moving averages.
Savy technical analysts may note that DKS's 10-week moving average is about to complete a bullish cross with its 20-week counterpart. Such a move is bullish by nature, and could signal that the stock is in for an intermediate-term push. Of course, any intermediate run higher will have to topple the aforementioned 50-week moving average. Finally, further resistance may come from DKS's 10-month moving average, which it has not closed above since early 2008.
Want good news for the sporting goods retailer? The short term doesn't look too bad. The stock spent March rising along the support of its 10-, 20-, and 50-day moving averages -- a trend that could continue.
Bottom line: The stock faces quite a bit of overhead pressure (I didn't even mention the $16 level) as far as the intermediate and long term are concerned. One may be able to capitalize on a quick push higher. Of course, the current economic environment doesn't lend itself to a lot of people buying $300 drivers and $1,500 home gyms -- for that reason, it may take DKS longer than other retailers to finally catch onto a broader rally.
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Reader Comments (Page 1 of 1)
4-05-2009 @ 9:22PM
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4-03-2009 @ 2:42PM
Iridium said...
Dick's is nothing but a stock scam. They are the worst corporation for a supplier to deal with and they leave no profit incentive to do business. The only thing that has kept them afloat is being able to buy out thier competitors.
Now that building new massive stores is not an option they are going to be in big trouble. They use "Modern Accounting Tactics" in other words they lie and cheat to make up a bottom line to fool investors. The reality is that a single Dick's store can in no way sell enough product to keep that store open. If you do the numbers every Dick's location needs to sell $30,000 worth of product a day to make thier internal numbers viable. I dare anyone to sit in a Dick's store fro a week and see if they even move that much during that entire time.
Just like the rest of the stock market DKS is a total fraud. However that might mean that it is a very good company to invest in because the fraudulent seem to make people into billionares.