Avon Products, Inc. (NYSE:AVP) – Wait for turnaround signal

Avon Products, Inc. (NYSE:AVP) is seen as the worst stock of 2015 by many people, especially when compared to the performance of the broader market indices like S&P 500. In this year, the S&P 500 has appreciated just over 2%, not a whole lot, admittedly but looks extraordinarily good when it is considered that the stock has lost over 18% in the same period.

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Many people blame Sheri McCoy, the current CEO of Avon Products, Inc. (NYSE:AVP) for her inability to turn the fortune of the company around. When Sheri McCoy had taken the reins in 2012, the loss from continuing operations stood at $38 million against revenue of $10.7 billion. Now the loss from continuing operations has increased by 10 times to $38 million against lower revenue of $10.7 billion. This makes it easy to understand the sentiment of the market regarding her tenure.

AVP

The fundamentals do not provide any hope but there is just a faint glimmer from the technical front. The last swing high was registered at $9.26 on 5th March, followed by a vertical crash to $7.10 by March 18, just below the January swing low of $7.25. The price breakdown came out of a Triangle pattern, which generally signals that the trending phase is coming to an end soon. So the last fall from $9.26 can be noted as possibly the last part of the intermediate downtrend and perhaps a broader base building, if not a sharp bounce, can be expected in the next few weeks.

The indicator RSI has marked a higher low while the price has registered a lower low, suggesting just a little bit of loss of bearish momentum but that must be confirmed by price which remains to be seen. The best indicator for a reversal would be an RSI reading above 65, which could lead the investors to attempt bottom fishing. Wait till then.

 

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Cooper

Cooper

Cooper is a graduated from Buffalo State College in New York with a bachelor's degree in Broadcast Journalism.