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Technical Monday: A Fresh Look at the “Vanity” Trade

November 25, 2024

Mish's Daily

By Mish Schneider

With such a great start to the holiday week, we could not help but gloat a little about the stocks I have mentioned related to the diet drugs, or what I call the “vanity” trade.

IPAR (perfumes), ELF (cosmetics) ULTA (beauty store) HIMS (online products for men and women) all posted huge gains today along with our Granny Retail XRT.

If the trend continues, there are still stocks that could perform very well going forward.

Nike is one, also posted gains today, and the other is Nu-Skin (NUS).

Nu Skin is an American multi-level marketing company for personal care products and dietary supplements.

They survived a scandal in 2016 and paid a $47 million class-action settlement, citing failure to disclose that its Chinese subsidiary did not register properly as the direct seller.

Nu Skin paid $750k in fines to the United States Securities and Exchange Commission following allegations of a bribe that saw charity funds go to a Chinese politician.

However, as an American company, it is possible, under a new administration, they could compete if tariffs are employed.

Since 2022, Nu Skin has launched new products popularized by Venus Williams. These products (RenuSpa iO) are related to the company’s first integrated beauty and wellness device.

Nu Skin Enterprises' ex-dividend date is one business day before the record date, which is on November 29th. This means that investors can purchase the company's shares before this date to be eligible for the dividend, which will be paid on December 11th.

Third quarter earnings results were good.

Nu Skin Enterprises' revenue missed analyst estimates by 2.5%, but EPS exceeded analyst estimates by 17%.

Looking at the charts:

The chart I posted is a weekly timeframe.

As you can see, there are the usual 50 and 200 weekly moving averages I always refer to.

Today, while I use this exponential moving average personally, I have never published it in a Daily until now.

The black dotted line intrigues me most.

Note that since early 2023, the price on a weekly basis has not cleared the EMA.

Also note that in January 2023, the EMA lined up with the 50-WMA and 200-WMAs.

Now, they are far apart.

Hence, a short week yes, but should NUS clear the EMA, the breakout is compelling and the risk nominal.

Remember, the technicals often precede the fundamentals. And this company fits into the “vanity” megatrend.

Educational purposes only, not official trading advice.

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