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Earnings Play: Coty

On Monday, before market, Coty (COTY) is expected to report third quarter EPS of $0.01 compared to $0.13 a year ago on revenue of appx. $1.5B vs. $2.0B last year. On April 29th, Henkel, a German conglomerate and KKR (KKR), a U.S. investment firm, made the decision to hold off on purchasing beauty brands that Coty has been attempting to sell since early 2020, according to Reuters. 

Looking at a daily chart, Coty's stock price recently broke to the downside of a symmetrical triangle pattern that began in mid-March and ended in late April. Price is currently below the 20, 50, and 200-day moving averages. A retest of the  50-day moving average as resistance is possible therefore we have placed a stop at the $6.00 level. If price fails to break above the $6.00 level then it is more likely that price will pull back and continue downward creating a descending channel. We would then anticipate prices to reach $4.25 and likely revisit the 2020 lows at $3.00.     

Source: GAIN Capital, TradingView


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