Hanesbrands Inc. (NYSE:HBI) is a darling of the market as it keeps rising for not only days or weeks, but months and years. This consumer goods company has seen nearly all of its steps working and that have resulted in a flurry of upgrades coming from the various broking houses, fuelling more buying. The last two acquisitions, Maidenform and DBA, are already in the phase of integrating the operations and generating distinctive synergies for the parent company. This kind of aggressive acquisition strategy may really help the future growth as the two brands mentioned above, are expected to bring not only more traffic to HBI but benefit the company through innovation too.

What does the Relative Strength Indicator (RSI) say about future trends with HBI?

Hanesbrands Inc. (NYSE:HBI) now plans to acquire Knights Apparel to boost the mass retail segment of the company. The cost of $200 million is supposed to come out of the company’s own cash and short term borrowings and may cause a temporary cash crunch but the long term benefit can’t be ruled out.

The technical state of the stock looks purely bullish in all time frames from the charts. The stock was stuck in the range of $6-$8 during the period of 2010-11 but in the middle of 2012, it broke out to begin the mother of all bull markets. The angle of the non-stop rally took a sharper turn in 2014, implying the acceleration of the bullish momentum and the early part of the current year shows another similar phase. The implication of the volume spike on Friday is not clear yet but if it is not a distribution at the higher levels and the price can sustain above $34, we can see $40 sooner than expected.

On the other hand, a failure of the stock to trade above $34 in the current week may signal a short term profit booking with major support at $28-$30 band.