Conclusion, Investment Implications, Strategy

Floor & Decor Holdings, Inc. (FND) is amid favorable conditions to resume its May 2020 Strategic advance from major underlying support near $92.41, which is currently being tested.  A sustained rise above this area would target an additional 20% rise to $116.58 per share.  This is an Asbury Value trade idea.

Analysis and Rationale

Floor & Decor Holdings, Inc. (FND) operates as a multi-channel specialty retailer of hard surface flooring and related accessories. The company’s stores offer tile, wood, laminate, vinyl, and natural stone flooring products, as well as decorative and installation accessories. It serves professional installers, commercial businesses, and do-it-yourself customers. As of June 9, 2021, the company operated 140 warehouse-format stores and two small design centers in 32 states in the United States. Floor & Decor Holdings, Inc. also sells products through its Website, FloorandDecor.com. The company was formerly known as FDO Holdings, Inc. and changed its name to Floor & Decor Holdings, Inc. in April 2017. Floor & Decor Holdings, Inc. was founded in 2000 and is headquartered in Atlanta, Georgia.

The rightmost green highlights in Chart 1 below show that FND is currently testing its 200-day moving average, a widely-watched major trend proxy currently at $92.41 while rebounding from monthly (our Tactical time period) oversold extremes.  The other green highlights show that a similar environment closely coincided with a Tactical bottom in early March.  These conditions set up a low-risk buying opportunity to buy an uptrending stock in a potentially low-risk/high reward environment, just above major support.  If the current major uptrend in FND is still valid, this is where it should resume.

Chart 1

A sustained rise above the $92.41 area would indicate this is indeed the case and would target an additional 20% rise to $116.58 per share. 

Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $93.33 area, a long entry price of $97.30 would provide a 1:4.9 risk/reward ratio (risking $1.00 to make $4.90) with an initial risk of 4.1%.

Table 1

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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.