HOTT on the daily chart shows a rolling over pattern after a stupendous run with all the retailers. From a technical standpoint this looks overbought and ready for a pullback.Eric wanted me to look at a retail stock that could falter with a market correction or pullback.
HOTT trades at a rather high PE of 27 trailing earnings and 19 forward, expecting a 15% earnings growth rate.
The bullish case can be made that it has a teen clientele which tends to be recession- proof and the stock has high short interest ratio of 7.9 days. Also, analysts have recently increased their earnings projections for next year.
HOTT on the 65-minute chart shows a steady down trend with a low volume bear flag developing today. Careful traders would wait for this to break below 12.14 to enter a small short position and add to it below 11.60.
HOTT on the 65-minute chart shows a steady down trend with a low volume bear flag developing today. Careful traders would wait for this to break below 12.14 to enter a small short position and add to it below 11.60.The next support is 9.00 if the retail market melts down.
UPDATE 6:00 pm 5-6-09: HOTT dropped 14% after hours, I took profits.
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