Founded in 1977 by Stanford graduate Roy Raymond and his wife, Gaye, Victoria's Secret began with five lingerie stores and grew into the largest U.S. lingerie retailer. Today, it also offers Victoria Sport activewear, swimwear, and a beauty line. It appears that "The Angels Are Back" at Victoria's Secret, with its YTD return of 58.93%, sitting at the top of the SIA S&P Small Cap 600 Index Report. Having entered the favored zone in August 2024, the stock rose to the top position of that SIA Report. For rules-based SIA practitioners investing only in SIA Favored zone stocks, purchases would have started at $22.20, providing an 87.24% return based on the recent price of $42.18. While relative strength is the main guide for SIA practitioners, this breakout from its downtrend can also be seen on the SIA candlestick chart, showing the move through the red negative trendline in August and the subsequent rise to $45. This aligns with the SIA report relative outperformance marked by the light green oval. Given that the latest weekly candles have turned bearish (red) for the first time in 10 weeks, it is important to review the situation, identify resistance points, and find support for VSCO, which can be better done with the point-and-figure (PNF) chart in the next section.
In the attached point-and-figure chart, the relative outperformance from late summer 2024 is visualized with the SIA matrix position overlay tool engaged. Over the past four months, shares have moved up through the red negative trend line and through the light green box (intermediate-term resistance), beyond which materialized into a significant rally in the stock's price. VSCO now faces a new resistance zone near the $50 mark, consistent with a whole number psychological level and a trading range seen back in 2022. VSCO shares have moved to the first column of O's, as supply has taken control of the trading heading into 2025. Specific resistance points are at $50.79, $48.82, and the 3-box reversal threshold of $46.00. From a support perspective, foundational PNF levels can be found at $38.49, $35.56, and $30.35 (old resistance). One last diagnostic that we can ascertain from the SIA Ai platform is that of the SMAX score which remains positive at 7, although it has decreased from the perfect 10 reading on December 18th, reflecting declining near-term relative strength against other asset classes. As we head into a new year, it’s an ideal time for advisors to enhance their expertise and further integrate SIA insights into their investment strategies. SIA agents are available and ready to support your learning journey, helping you deepen your understanding and apply the principles of relative strength to client portfolios. Strengthen your advisory practice and take full advantage of the SIA framework—reach out today to double down on your SIA education and unlock new opportunities for success.
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