To The Moon

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Here’s today’s newsletter:

Deckers Outdoor Corporation (NYSE: DECK)

DECK has been trading in an ascending channel (in purple) for the past 26 years, with higher highs and higher lows since 1998. In the early 2000s, DECK had a trend markup, forming a tighter ascending channel (in blue). The stock has hit its channel resistance only 3 times - namely in 2008, 2011 and in 2025. In all 3 cases, the stock broke down from multi-year shorter-term trendlines (in green) upon hitting channel resistance.

At the end of last month, DECK had a record quarter, putting up its highest revenue and gross profit ever. However, it gave a very bleak outlook for the year ahead, causing the stock to dump significantly after earnings. This coincided with a breakdown of the multi-year ascending channel dating back to Jul’22.

DECK subsequently formed a weekly bearish imbalance with a large range (177.64-210.60). Based on its current trajectory, it could be headed to test the COVID-19 trendline support (dating back to Mar’20, also in purple) while resetting higher timeframe oscillators. I’ve marked the bullish imbalances that DECK formed on the way up, which could act as support.

The risk-to-reward still favours bears at this point, if we see a breakdown below 147.82 (monthly imbalance support), which opens the door for 135.85 (weekly imbalance + strong support). Otherwise, DECK could see a significant dead cat bounce back into the bearish imbalance resistance at 177.64.

While stocks tend to go up over the long-term, the breakdown of the multi-year trend has historically preceded a pullback or a substantial correction. Bulls need to reclaim 177.64, otherwise DECK is likely to form a lower high and push lower into the bullish imbalances left behind.

Novo Nordisk A/S (NYSE: NVO)

NVO has been trading in an ascending channel (in purple) with a series of higher highs and higher lows for more than 35 years. It has hit channel resistance 4 times in that period, namely in 1998, 2014, 2015 and most recently in 2024.

Based on prior price action, it has 2 unfilled bearish imbalances (89.97-99.42 and 113.02-117.49) and numerous more bullish imbalances it created on the way up to channel resistance. It closed the week just below the 78.15 level, having successfully defended it the week before.

In the shorter term, I would focus on the 76.55 (bullish imbalance support) level. Should that level hold, it could stop the downtrend in the short term, given that the lower timeframes (daily, weekly etc.) are still fairly oversold. A breakdown below this level will see the 71.96 level getting filled. For stocks in downtrends that are in the middle of channels, we really have to take it level by level. No substantial divergence has formed yet to give us a good sensing of where this is headed next.

That being said, the current price action is not indicative of a top. Most tops usually form as a result of:

(1) A double top with equal highs or a blow-off top:

Enphase Energy, Inc. (NASDAQ: ENPH)

(2) A lengthy distribution period that forms a rounding top pattern, as seen below:

SolarEdge Technologies, Inc. (NASDAQ: SEDG)

NVO does not fall in either category, leading me to think that this is just a pullback in the wider scheme of things. This stock has been through a lot over the past few decades, but it has continued to hold firm and continue to form higher highs and lows. Bearish sentiment only takes over if it breaks down from its multi-decade ascending channel.

Will DECK and NVO recover? Or will they languish for the next few months and maybe even years? Let’s find out together!

$Deckers Outdoor(DECK)$ $Novo-Nordisk A/S(NVO)$ $Enphase Energy(ENPH)$ $SolarEdge(SEDG)$ $NVIDIA(NVDA)$

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