Long on CHWYCHWY is currently in a descending wedge with bullish RSI divergence. Look for a breakout and retest of support zone for entry, stoploss at last swing low and will be moving SL to BE when safe to do so.
CHWY trade ideas
The bounce back for Chewy NYSE:CHWY has been in the dog pound and nearing all-time lows. With a generation of single millennials adopting furry friends for some much-needed companionship, Chewy is bound to have its day in the sun (Ayyy don't kill the messenger just observation 🤣 )
At this discounted price, I'd say Chewy is a real diamond in the ruff, and it's only a matter of time before it bounces back. After all, who doesn't love a good bargain? Woooof
Chewy Stock Surges 25.37% on First Quarter 2024 Financial ResultChewy stock ( NYSE:CHWY ) surged 25.37% on the first quarter 2024 financial result, following a strong Q1 2024 earnings report that beat Wall Street estimates and an increase in Autoship sales. The company reported adjusted earnings of 31 cents a share on revenue of $2.88 billion for the quarter ended April 28, beating analysts' expectations of 20 cents a share on revenue of $2.85 billion. In the same period last year, the company posted earnings of 20 cents a share on revenue of $2.79 billion.
Chewy ( NYSE:CHWY ), a pet supplies website, is known for its Autoship offering, which allows users to have items scheduled to automatically be delivered at their home for a discount. During the quarter, Chewy reported a 6.4% increase in Autoship customer sales from a year ago to $2.23 billion.
The pandemic-driven surge in pet adoptions during the height of Covid-19 saw a jump in demand, but adoptions have slowed and rising prices have seen Chewy ( NYSE:CHWY ) take a hit. The company's financial results for the first quarter of fiscal year 2024 ended April 28, 2024, showed strong net sales and record-breaking Adjusted EBITDA.
Technical Outlook
Chewy stock ( NYSE:CHWY ) stock is up 26% as of the time of writing prior to the earnings beat. The stock's Relative Strength Index (RSI) of 74.51 signifies the stock is currently overbought.
CHWY Weekly ChartCHWY has had its ass beat for a long time now. However, things may be turning around soon.
Pictured above is a big-ass wedge formation as well as bearish divergence on both the RSI and the MFI which indicates to me that we could be looking at a major reversal to the upside.
Despite the decline in the pet sector, Chewy has faired much better than its competitors (Petco, Petsmart). However, things have gotten tricky after rising prices have forced consumers to cut back on spending. People can’t afford to spend too much on their pets beyond what is necessary and it shows in the beating that CHWY stock has gotten in the past year.
Even after its massive decline in value, CHWY has remained strong and delivered well on its last earnings report. If their next earnings report is just as good or even better than the last, hopefully we will start to see some upside.
5 waves down, Now ABC UPChewy looks to be at the end of a 5 impulse down. RSI on the weekly is showing a bullish divergence. I think the ABC correction will be in the works soon.
The Monthly chart also shows a bullish divergence on RSI. The higher the time frame the stronger the reversal will be on bull divs.
Chewy Faces Pet Industry Headwinds: Will the E-Tailer Persevere?Despite delivering better-than-expected quarterly results, the online pet food and accessories retailer faces headwinds stemming from moderating pet ownership trends. While Chewy's ( NYSE:CHWY ) outlook may have dampened investor sentiment, its commitment to continued growth and market share expansion remains steadfast.
Navigating Market Volatility:
Chewy's ( NYSE:CHWY ) fiscal fourth-quarter earnings report initially sparked optimism, with earnings per share surpassing estimates and revenue exceeding expectations. However, concerns over a 2% year-over-year decline in active customers and a cautious outlook for the pet industry tempered investor enthusiasm. As a result, Chewy ( NYSE:CHWY ) shares experienced a premarket decline, reflecting market uncertainty surrounding the company's future trajectory.
Challenges Amidst Opportunities:
The e-tailer's warning about moderating pet ownership growth reflects broader industry trends influenced by shifting consumer behaviors. While pandemic-induced pet adoptions initially surged, the return to office mandates and inflationary pressures have tempered this momentum. Despite these challenges, Chewy ( NYSE:CHWY ) remains optimistic about its prospects, citing continued adjusted EBITDA margin expansion and a commitment to gaining market share.
Charting a Path Forward:
Chewy's ( NYSE:CHWY ) stock performance mirrors the company's broader challenges, with shares drifting sideways since late September within a longer-term downtrend. The 50-day moving average, acting as a resistance level, has exerted downward pressure on the stock price. However, attention now turns to the February swing low at $15.78 to $14.5, which could serve as a crucial support level. A reversal at this juncture could signal a potential short-term bottom and pave the way for a reversal in fortunes.
Future Prospects and Resilience:
Despite near-term uncertainties, Chewy's resilience and strategic initiatives position it favorably for future growth. The company's focus on customer experience, product innovation, and digital capabilities underscores its commitment to staying ahead in a rapidly evolving market.
CHWY potential buy setupReasons for bullish bias:
- Price has tested support
- An entry at the lower highs (LH) breakout for trend confirmation
- Bullish divergence
- Megaphone pattern
- XABCD pattern on weekly
- Earnings on 20th March, NYSE:CHWY might show good moves
Here are the recommended trading levels:
Entry Level(Buy stop): 19.27
Stop Loss Level: 15.37
Take Profit Level 1: 23.17
Take Profit Level 2: 29.21
Take Profit Level 3: Open
TEXT book set up - have been waiting for pull back BUYChwy had been experiencing an all time low over the course of a few months - went to low, found support, had a break out at resistance, is not experiencing a pull back at previous resistance (new support range) Currently bought 245 shares at $20.79 per unit. Looks like a TEXT book pull back buy set up - have been waiting for pull back set up since mid december. Swing - Currently looking for an exit at $22.69.
Dark Pool Buy Zones for Trading Momentum or VelocityDark Pool buy zones, identified with Relational Technical Analysis of the candlestick patterns and where they form in the long-term trend, along with indicators that reveal large-lot activity, are the key to preparing early for momentum to velocity runs for swing trading, position trading and even for planning long-term investments.
NYSE:CHWY is working on a bottom, finally basing and now starting to test the bottom completion level. This can be a strong resistance level where Pro Traders who started a swing trade from the lows are likely to take profits.
Often we see a sideways action develop at this level, the lows of which are usually confined by the support level built on the way up.
This would be the level to watch for the next buy entry signal. If it consolidates narrowly or briefly, then there is potential for a momentum swing trade. If it platforms a little wider but within the last support level, then a position trade entry can develop.
Chewy's (NYSE: $CHWY) Road to Strategic Stabilization
Despite Chewy A (NYSE: NYSE:CHWY ) currently being in a falling trend channel in the medium long term, there are positive signals for potential recovery. The recent break of a resistance level suggests a positive shift in the long-term trading range.
Additionally, the identified support at $17.00 provides a potential floor, indicating a level where investors may find value. While acknowledging the challenges, the positive signals suggest that Chewy A (NYSE: NYSE:CHWY ) might be entering a phase of stabilization and potential upward movement.
