Offsides Penalty Called on Foot Locker Bears

After earnings, Foot Locker is surging more than 22% as I write this. Inside Market Chess Subscription Services, the retail footwear niche has been an industry of interest lately, though FL had one of the weaker charts. Instead, we focused on plays like SKX with better overall charts.

However, when we see both FL and Show Carnival (SCVL) each surging by more than 20-30% this morning, it raises the specter of a resurgent footwear industry all the way around into the holiday season. 

Recall that most of these retail plays were once castigated as being part of Amazon's prey, merely marking time before they perished. 

But on the multi-decade Foot Locker chart, below, bears seem to have been caught offsides, as FL is surging off the mid-$30s, which was a significant price level dating back to the late-1980s(!). Indeed, to bet on FL decisively losing that level after earnings was essentially a bet on the firm event making its way down to the teens, and then perhaps zero. Granted, FL's recent weakness saw the name undershoot the mid-$30s, though the earnings move today negates that undershoot. 

Going forward, the footwear niche contains quite a few notable charts we are stalking, and seeing laggards like FL SCVL surge today ought to only embolden the stronger charts in the group.