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CHBS - Chirstopher & Banks Corp.Week Ended: 1/27/01
Price 38.69 P/E Ratio 17.23 52 Week High 41.88
Last Week + 3.69 Earnings Date N/A 52 Week Low 9.00
Picked At 36.25 Date Picked 1/18/01 Sector Services
Current 38.69 Open 36.63 Change 2.13
Low 36.38 High 39.13 Volume 481,300

Company Description

Christopher & Banks Corp. is a Minneapolis-based regional retailer of women%s specialty apparel. As of 09/22/00, the Company operated a chain of 274 stores in 27 states, primarily in the Midwest. For the 39 weeks ended 11/25/00, net sales rose 44% to $141.1M. Net income totalled $17M, up from $6.3M. Results reflect an increase in same-store sales as well as an increase in gross margins due to improved selling at full price.

Play Description

January 18, 2000

Christopher & Banks Corporation is a Minneapolis-based specialty retailer of women’s apparel. Formerly known as Braun's Fashions Corporation, CHBS currently operates over 250 stores in 27 states throughout the northern half of the United States. The company has plans to open 30 new Christopher & Banks stores throughout the spring and summer 2001. In addition to good fundamental growth, the stock may also be getting a boost from yesterday’s announcement of a 3:2 stock split, its third split over the past 14 months. After the two previous splits, the company’s stock gained 157% and 70%, respectively. If CHBS’s post-split record continues, then we’ll look for another profitable run. With this in mind, we’ll look for the stock to face its initial test at the intermediate high of $37. Secondary resistance should be stiff at $40, bolstered by another intermediate high. Just higher, the all time high of $41.88 will likely hold the toughest challenge yet. Look for entry points when upside volume of 162,000 shares or better can accompany the stock through resistance. As for support, we’ll expect the $33.50 mark to hold a strong initial base, bolstered by the convergence of the 5- and 100-dma’s ($33.54 and $33.56), respectively. The 10-dma of $32.60 strengthens secondary support at $32.50, which may be the final base ahead of our stop at $32.00. We’ll use support and resistance to guide our entry and exit points ahead of the split payable date of February 12th.

Picked on January 18th @ $36.25
Change since picked 0.00
Stop Loss @ $32.00


January 25, 2001

In an effort to cut costs, apparel companies have been shifting more of their manufacturing processes to lower-cost facilities offshore. This trend is expected to reduce labor costs and help CHBS improve its bottom line by 25% this year. When faced with an unpredictable earnings environment in the technology sector, 25% sounds pretty good. Thursday, CHBS shares were able to reverse mid-day losses with a rally at the close, which enabled the stock to finish in positive territory. Although the stock only closed up 0.56, decent volume of 214,400 accompanied the run and could suggest that CHBS is gearing up for another advance. Should this unfold, we’ll look for a preliminary test of strength at the recent high of $37.94. Should the stock bounce sharply off this level on heavy selling, then we’ll expect to see more consolidation. However, a strong advance through this level could trigger additional buying from momentum players, which in turn could send the stock to its next resistance at $40. With several previous highs near this level, we expect a much tougher challenge to arise. Remember to look for additional entry points when volume of 163,000 shares can accompany an advance through resistance. For support, the 5-dma of $36.50 will represent the initial base ahead of a much stronger foothold at the $35 mark. If selling pressure becomes to great for this level, then expect to see a further retracement to the 100-dma of $33.56. This will likely be our last safety net ahead of our stop at $32. Sharp bounces off support will signal low-priced entries, when good mid-day volume of 80,000 shares or better can accompany the bounce.

Picked on January 18th @ $36.25
Change since picked +0.31
Stop Loss @ $32.00

January 23, 2001

Today’s shopping environment places a greater premium on differentiation among competing merchants. To deal with this change, CHBS has created its own private brand of clothing, which has helped to build a unique store identity and establish a competitive point of difference. As for trading Tuesday, CHBS shares got off to a quick start with a gap up at the open, but steady selling pressured shares for the remainder of the day. However, volume did come in light at 107,200 shares traded, which is a good indication that few investors are choosing to fold their shares. Furthermore, we want to point out that the longer trend shows steady buying and is a good indication that investors are waiting for the split run to produce more profits. With that said, we’ll be looking for initial resistance to come at the $40 mark. Secondary opposition should be much tougher at the all time high of $41.88. Wait for volume to meet or exceed 163,000 shares as the stock breaks above these points prior to opening positions. As for support, the 5-dma of $36.06 has been providing good trendline support over CHBS’s recent run and will represent the initial foothold. Should this level fail to hold, stronger support is likely to come at $35. Use quick reversals from these points to trigger entries when good mid-day volume of 80,000 shares or better can accompany the bounce. Remember to keep firm stops at $32. Plan your exits ahead of the February 12th payable date.

Picked on January 18th @ $36.25
Change since picked +0.50
Stop Loss @ $32.00

January 21, 2001

Despite some loss of momentum to the broader retail sector, the retail apparel group actually seems to be gaining momentum. Over the last 3 weeks CHBS has posted a 58% gain versus an 8% advance in the S&P Retail Index (RLX.X). As for our stock, CHBS gapped up at the open, which sent shares to an intraday high of $37.06. However, resistance at $37 likely created some selling pressure, which sent shares down to $36.06 at the close. CHBS actually tested a low of $35.13, but gave a sharp intraday bounce off this level ahead of the close. With that said, we expect to see an initial support base arise at $35, which is strengthened by recent highs. Secondary support can be expected at the $33.50 mark, bolstered by the 100-dma of $33.58. The 10-dma of $33.15 will likely be the final foothold ahead of our stop at $32. Use quick reversals from support levels to trigger entries, when good mid-day volume of 80,000 shares or greater can accompany the bounce. On the upside, we’ll look for resistance to remain at $37, with a tougher challenge at the intermediate high of $40. CHBS will likely require volume of 160,000 shares to fuel a rally to this upper level. Should this occur, we will look for potential entry points as the stock breaks through resistance. Plan your exit strategies ahead of the February 12th payable date.

Picked on January 18th @ $36.25
Change since picked –0.19
Stop Loss @ $32.00


Copyright 2001

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