Mish’s Daily: The Vanity Trade – Two Trade Ideas

4 months ago 272 views 6 min read

Michele “Mish” Schneider

Director of Trading and Education

MarketGauge.com

Mish’s Daily: The Vanity Trade – Two Trade Ideas

Written by Michele ‘Mish’ Schneider

Yesterday’s Daily mused about what will untie the Gordian Knot holding back the market from either crashing or rallying.

While we wait, it feels like a great time to plan for future trades.

I have been all over the “Vanity” trade, based on the assumption the diet drugs lead to bringing in a new wave of consumers.

Let’s focus today on 2 stocks I am watching very carefully.

First is Nu Skin-(NUS).

Some stats:

Nu Skin Enterprises offers a range of popular products across skincare, wellness, and beauty.

1. Company Overview:

* Nu Skin Enterprises is an American multilevel marketing company.
* It develops and sells personal care products and dietary and nutritional supplements.
* The company operates under the Nu Skin and Pharmanex brands.
* Its products are sold in 54 markets worldwide through approximately 1.2 million independent distributors.
* Nu Skin aimed to create skincare and nutritional products without unnecessary fillers, following the philosophy of “all of the good, none of the bad” in their formulations.
2. Global Presence:
* Nu Skin operates in nearly 50 countries across Asia, the Americas, Europe, Africa, and the Pacific

COTY Inc (COTY)

1. Founding and Overview:
1. * Coty Inc. is an American multinational beauty company founded in 1904 by François Coty.
* It develops, manufactures, markets, and distributes fragrances, cosmetics, skin care, nail care, and professional and retail hair care products.
1. * Coty owns around 40 brands as of 2024.
2. Revenue and Divisions:
1. * Coty is one of the world’s largest beauty companies.It generated $5.3 billion in revenue for the fiscal year 2022.
1. * The company operates three divisions:
  1. a) Consumer Beauty: Focuses on body care, color cosmetics, fragrances, and hair coloring/styling products.
  1. c) Professional Beauty: Services beauty salon and nail salon professionals.
3. Brands:
1. * Coty owns approximately 40 brands, including Bourjois, Calvin Klein, Gucci, Hugo Boss, and Kylie Cosmetics (51% ownership).

Kylie Jenner and Kim Kardashian are part of Coty’s acquisitions to help Coty “celebrate and liberate the diversity of beauty.”

Now, we look at the charts.

NUS is in a Recovery Phase above the 50-DMA.

The stock is on par in Triple Play or Leadership against the benchmark.

Real Motion shows a mean reversion sell signal but in a bullish momentum divergence.

COTY is in a bearish phase.

It is well underperforming the benchmark.

The stock looks like it is having a mean reversion to the buy side.

Most compelling-a potential key reversal happening with any gap higher leaving a potential island bottom. Both these stocks look promising, but like I wrote at the top, the market will have a lot to say about how we approach these investments and when.

Educational purposes only, not official trading advice.

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