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Are Charts Forecasting Drops In Tiffany, Coach?

Monday, 9 Jan 2012 | 4:14 PM ET

Recent Tiffany and Coach stock-price trends suggest to “Fast Money” technical analyst Abigail Doolittle that share prices are heading south for both companies.

“I suspect that relative to what’s going on here with Tiffany and potential weakness ahead, it’s not so much about the holiday sales in the past, but more about this company’s exposure to the international scene,” the Peak Theories Research analyst said Monday. “More than 50 percent of their sales are global.”

Chartology: Vulnerable Retail Stocks
Trading a potential retail breakdown, with Abigail Doolittle, Peak Theories Research, who says there are vulnerabilities in the retail sector.

Doolittle said “a bearish wedge pattern” was forming in Tiffany’s stock price, suggesting a price target of about $56 per share.

“It’s confirmed,” she said. “It’s fulfilling.”

Doolittle looked to potentially weakening demand in Europe and Asia, which could see a slowdown in China demand for luxury goods.

Coach stock prices formed a “bearish, descending triangle,” which Doolittle said suggested that Coach would be trading down in the not-so-distant future.

Doolittle said the downward pattern has not been confirmed but was pointing in that direction on-again, off-again in recent weeks.

“I suspect Coach is also vulnerable to the downside, likely to test support probably between $45 and $50,” she said.

Tiffany shares closed up 1.8 percent at $66.94. Coach closed at $62.86 per share, up 0.35 percent.

Trader Brian Kelly said a slowdown in Asia was a legitimate concern for those companies, as well as another retailer that counts on its New York flagship for 25 percent of its sales.

“I would be concerned about Coach and Tiffany,” he said. “Watch out for Saks, too.”


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Trader disclosure: On Jan. 9, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Najarian is long AAPL stock and calls; Najarian is long C; Najarian is long JPM calls; Najarian is long WFC calls; Najarian is long MSFT; Najarian is long INTC; Najarian is long YHOO; Najarian is long BMY calls

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