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Finish Line (FINL) Breaks Below Key Support

Shares of Finish Line (FINL) fell sharply on Friday after reporting earnings that missed estimates.

(CNBCFinish Line — The athletic footwear and apparel retailer missed estimates by 21 cents a share, with quarterly profit of 50 cents per share. Revenue did beat forecasts, but same-store sales slid more than expected and its full-year outlook is below consensus estimates. The company said the quarter was a disappointing finish to a challenging year, as some of its footwear lines did not catch on with customers as much as Finish Line had expected.

The sell-off pulled the share price of FINL below a key support area, opening up further downside risk.

Finish Line (FINL) Weekly Chart

(click to enlarge)

Confirmed Reversal:
- Even before this week, we had a pretty good signal of a bearish reversal at the turn of the year when price held under 25.00.
- This Friday's price action pushed FINL below the neckline around 15.00. 
- We should not be surprised if there is a subsequent free fall.
- This happened in 2007 after several years of essentially the same type of price action we have seen in the recent years.
- Even if you are not completely bearish on FINL, it just looks tough to be bullish on it. I would limit any bullish outlook to the 15-16 area because it is quite possible we will see a "dead cat bounce" to test the neckline as resistance.