This Is How You Hammer Out A Bottom

Children's Place (PLCE) printed a reversing hammer on Friday just after touching gap support at 70.51.  This comes off a lengthy downtrend that began in mid-April after a negative divergence had developed.  Take a look at the technical picture on a daily chart first:

Adding further bullishness is the set up on the weekly chart where PLCE shows very strong momentum and just tested its rising 20 week EMA.  Take a look:

Normally a 20 period EMA test with a strong MACD represents solid reward to risk entry.  The 20 week test, together with a test of both price and gap support, provides a nice argument for owning PLCE in the near-term.

(DISCLOSURE:  I currently own shares of PLCE)

Happy trading!

Tom