Looking back at the October 17th, 2024, daily stock report analysis, the warning on ELF Beauty’s stock proved consistent with SIA's technical readings. After the SIA system detected a decline in relative strength, shares fell sharply, dropping over 40%. The stock began to stabilize after moving lower through key support levels at $131 and $121, at which point SIA highlighted more important support levels at $94, $83, and $68. Despite occasional attempts to rebound, ELF remained at the bottom of an underperforming sector, with strong resistance at $121 and $134. The stock's SMAX score of 0 appeared to confirm its underperformance from another vector against alternative asset classes, which might emphasize the potential high risks for those continuing to hold the shares. We mentioned in that report that while stocks can rise higher than we often anticipate, they may also decline much further than seems fundamentally sensible.
Fast forward another 4 months, and indeed shares of ELF have continued to slip, down another -41.08% in the past 3 months. Share prices have now penetrated the $96 support as well as the $83 level (both now resistance), leaving the $68.56 level as new support, along with the long-term trend line around $50, but specifically highlighted at $48.96 on this 2% scaled point-and-figure chart. Still, shares of ELF carry a negative SMAX score of 0/10 as they underperform all other asset classes, including simply holding cash. Meanwhile, our main coach relative strength still has shares of ELF buried at the absolute bottom of all SIA reports, including the SIA S&P Mid-Cap Index Report, where it is in dead last position out of 403 names covered in the report.
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