Williams-Sonoma 6% Decline, CFO Resigns [TECHNICAL ANALYSIS]


Williams-Sonoma, the retail company that operates Pottery Barn chain, saw their stock decline 6% yesterday, although fourth-quarter earnings per share beat estimates by $0.04, rising 8% in comparison with last year’s same quarter. Yet, the WSM shares lost about 2 dollars per share during Thursday’s session, forming a frightening reversal candlestick pattern in the stock’s weekly chart. The resistance level at $40 has been verified 4 times in the last 8 months according to technical analysis. In the meantime, Bollinger band is narrowing signaling an imminent stock move. With a strong all-time resistance at $45 and the apparent rejection at $40, the Williams-Sonoma stock is likely to enter a downtrend. Besides, if traders step a little back from their screens, they will see the huge channel ($5 – $45) the WSM stock is trading in since 1998!


The fall came as Williams-Sonoma issued a disappointing forecast EPS of 30 cents, 3 cents lower than analyst consensus. In addition, the retailer announced the retirement of Chief Financial Officer (CFO), Sharon McCollam who is also retiring from the board of directors on March 16. This kind of news obviously had an impact in WSM stock price on Thursday. Time will tell whether the impact is short-term or not.