Welcome to Extreme Investor Network, where we provide unique insights and valuable information to help you make informed investing decisions. Today, we’re diving into the children’s toy industry, specifically looking at two major players: Mattel (MAT) and Hasbro (HAS).
When it comes to investing in this sector, technical analysis can be a powerful tool in determining which stock may be better positioned for growth. Long/short equity fund managers often compare Mattel and Hasbro, as their trends can sometimes diverge.
Hasbro recently experienced a cyclical uptrend, breaking through resistance levels and showing bullish indicators. However, after a recent earnings report, the stock flashed some ‘sell’ signals, indicating a potential pullback in the near future with support near $61.
On the other hand, Mattel has yet to develop a clear cyclical uptrend, but it recently broke through a long-term downtrend line in a bullish reversal. Positive momentum indicators like the MACDs suggest potential upside in the coming weeks, with resistance near $22.50 and initial support at $19.40.
While Hasbro was the first to reverse its downtrend, it may be ceding leadership to Mattel, which has a newer positive technical catalyst. The ratio of MAT to HAS also supports this view, with a confirmed ‘buy’ signal and room for growth.
In uncertain market environments, a “pair trade” strategy could be beneficial, where a long position in Mattel is paired with a short position in Hasbro. This approach, backed by fundamental analysis, could help capitalize on the potential outperformance of Mattel in the months ahead.
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