ANF: Short (or sell) the stock in the short term

Abercrombie has been an extremely cyclical stock since the 3rd quarter of 2006, fluctuating between a high range of $80-82 with dips to the $70 area. There are 5 such dips in the past year and a half. With Abercrombie once again at its high range, it would be a good stock to short with a short term mind frame. So patterns within the stock price are one reason to short the stock. A beta of a 1.46 provides evidence to ANF's high volatility. Second, and just as important, the consumer sector ended the week on an unjustifiable and unsustainable high note. Even rival American Eagle shot up to $23 after steadily declining to $19. As we enter an economic slowdown, mid-high end retailers will particularly feel the slowdown. Is Abercrombie a poor company? Not at all. There are a lot of reasons to like the company, including strong fundamentals. However, the issues that will drive the stock down are not company-focused, they are sector-focused. Given the sector's problems, it would be a great stock to short. Wall Street was kind this week. It will not be in the next couple weeks ahead. Short the stock, and look for a $6-10 slide in the next few weeks which should make for a nice 7-12% return.