Technical Take: Fossil has a bullish pattern, large short base
Shares are coming down sharply in price ahead of earnings after the close, with the stock last down over 7.7% to $26.44. This has put price just below the top of a recent bearish price channel that began in late-June of this year. The top of the channel is at the $27.50 area and this channel was a bullish flag pattern in progress until the pullback. If the news tonight is a positive surprise, the bullish flag pattern interrupted today could become active if price crosses back above $27.50. Upside potential for this pattern if it triggered and remains active and completes is to the $35-$36 area over time. If the news is a negative surprise, a drop to the channel low at the $23 area may be possible. A drop below $23 would void the bullish flag. Next significant support would then be at the $20 area. There is a very large percentage of the float short at over 19.7% as of the last available report that could add significant buy-to-cover demand on a strong positive surprise.