Restoration Hardware Needs Some Resuscitation – Part 2

Restoration Hardware (RH), together with its subsidiaries, operates as a retailer in the home furnishings. It offers products in various categories, including furniture, lighting, textiles, bath ware, décor, outdoor and garden, tableware, and child and teen furnishings. The company provides its products through its retail galleries; and Source Books, a series of catalogs, as well as online.

Two months ago, RH fell more than 17% on Friday morning after announcing their quarterly earnings that didn’t meet expectations and gave a dismal forecast.  At that time, the weekly chart suggested if the weekly demand at $100 is breached, price will drop another $30 to the weekly demand at $70.

Restoration Hardware Needs Some Resuscitation

Today the company announced their first quarter earnings and raised their fiscal-year sales and profit guidance following first-quarter earnings that beat expectations.   On the news the stock increased double digits.

Despite the news, personally, I think the chart is setting up for a short.  Since the last time I posted about RH, price broke through the $100 weekly demand zone.

This means that there is room for price to decline further, meaning there are the floor on the stock is much lower. The chart suggests to short price if price climbs to the weekly supply at $134.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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