Under Armour is on a hot streak, and charts point to more upside

Trading Nation: Under Armour bulks up

Under Armour has done some heavy lifting in recent months.

The athleisure retailer has rocketed 15 percent in the past three months and has advanced 65 percent this year. Its shares are on track for their best annual increase since 2013.

Craig Johnson, chief market technician at Piper Jaffray, sees its stock scaling even higher highs.

"The setup on Under Armour looks great right now on the charts," Johnson said Friday on CNBC's "Trading Nation. " "We've got a longer-term kind of bottoming formation setting up here. Technicians will call this an inverted head-and-shoulders bottom and … it suggests a measured price objective up into the high-$30s."

An inverted head-and-shoulders pattern — marked by a low, a lower low and a higher low — is a bullish signal that typically suggests the end of a downtrend. In Monday's premarket, UA was at $24.20, up 1.3 percent. A move to at least $35 a share marks a 44 percent gain from that level.

Johnson also said declining short interest in the stock gives him confidence in the strength of the rally.

The "short-interest ratio, it's been declining since March, so it's not only the short covering here but there's some real meaningful buying coming in this," he said.

As of Friday, Under Armour had short interest at 19 percent of its float, down from a peak of 36 percent in April.

Boris Schlossberg, managing director of FX Strategy at BK Asset Management, is also a fan.

"I think it's a great buy at this point fundamentally," Schlossberg said on "Trading Nation" on Friday. "The stock is just doing a lot of things really positively, which is why you see almost everybody on Wall Street starting to really upgrade this stock and look for much better growth going forward."

Wells Fargo upgraded Under Armour to market perform from underperform on Friday, arguing that its two years of choppy performance are over. Analysts have an average hold rating on the stock, according to FactSet.