Upside Reversal Signal On WRBY
by Mike Paulenoff
October 27, 2024 • 1:32 PM EDT
Last Monday afternoon (October 21), Mike alerted MPTrader members to a Goldman Sachs upgrade of optical products retailer Warby Parker (WRBY) to Buy from Neutral. Goldman attached an 18.00 target price to the stock.
At the time of Mike's post to members, WRBY was trading at 17.55 in reaction to the GS upgrade, up 6% from the prior close, and just 2.5% from Goldman's 12-month target price.
After examining his near and intermediate-term technical and pattern setup work, Mike concluded that despite a very high valuation (P/E = 72), WRBY nonetheless exhibits considerably more upside potential than Goldman indicates from its fundamental analysis.
Below is what Mike discussed with MPTrader members about WRBY:
WRBY (Warby Parker)— Early this morning, Goldman Sachs upgraded WRBY to Buy from Hold and increased its Target Price to 18 from 15. One look at my attached BIG Picture Daily chart indicates to me that WRBY exhibits a potentially explosive, huge 2-1/2 year base-accumulation setup that belies the Goldman Sachs 12-month $18 target. Based on my work, if WRBY closes at 18, my work will trigger a next higher intermediate-term Target Zone of 27 to 29! That said, from a tactical trading perspective, anyone interested in establishing a long position in WRBY should plan to stick around at least six months, and also place a stop-loss on a violation of the up-sloping 200 DMA, now at 14.50... Last is 17.55...
WRBY closed the session at 18.22, a two-year high that triggered his technical projection of 27 to 29. As long as any forthcoming weakness in WRBY is contained above the trailing 200 DMA, now at 14.57, Mike's work will remain "friendly" to this name, and on a close above 18.37 (the October 22 intraday high), his pattern work will become decidedly bullish, looking for WRBY to follow-though to the upside from the confines of a 2-1/2 year accumulation pattern that will be "whispering to investors" about something fundamentally "transformational" unfolding within the company that is anticipated by the combustible chart setup. WRBY closed at 17.12 on Friday (October 25).
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