Ugg spokesman and New England Patriots quarterback Tom Brady has a lot on the line. Not only can he secure his team a spot in the Super Bowl with a win over the Baltimore Ravens in the AFC Championship game tonight, but the stock for Deckers, who owns the Ugg brand, is at another critical juncture.
In April 2012, I wrote this blog post describing the rare technical setup termed by George Lindsay as “Three Peaks and the Domed House” being present on the weekly chart of Deckers (see that post for full details). At the time DECK was trading at $51.83. Since then, the pattern has more than followed-through as Deckers tagged a multi-year low of $28.53 last November.
After that, though, Deckers made every attempt to stabilize. We have seen a bounce off those lows, but nothing goes down in a straight line forever. In other words, this is the first extended pause we have seen from Deckers since it topped out in late-2011. The issue is whether this is some type of major bottom. Observing the updated weekly chart below, a weekly close above $50 would likely need to be the first step for that thesis to have a chance.
Of course, we could also simply be looking at a bear flag within a powerful downtrend, and a break back below $34 probably sets up another leg lower. Either way, when a rare technical pattern actual triggers (most of the time they are overrated without the elements of the pattern actually met) as it did last year with Deckers, it sure commands your attention.
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