I spent Saturday shopping for new furniture. While I found the whole experience about as enjoyable as chewing on tin foil while combing my hair with a cheese grater, there was no lack married couples dropping their tax rebates on new furniture. But that goes against what Basset Furniture (BSET) had to say about the third quarter.
Basset sees sales down 20% for the third quarter due to the effects of a soft economy. Inventories are coming under control, but increased production and transition costs will lead to a breakeven quarter.
Basset Furniture Point and Figure Chart
Basset had a decent run in 2001, gaining over 50% since bottoming in December. But $15.50 has been stiff resistance, and has turned the stock back to start September. Now the space between the yearlong bullish support line and resistance at $15.50 is narrowing. Since both of these technical points have been in place for several months, whichever one breaks should tell the tale of Basset.
Ethan Allen Point and Figure Chart
While not my style, Ethan Allen (ETH) is the nation's leading home furnishings retailer and manufacturer. One of their latest ads touts "furniture built for you life at a price you can actually live with," but investors may soon not be able to live with Ethan Allen's stock price. The stock is currently trading on a buy signal, but is basically contained in a trading range between $33 and $38. Right now ETH looks more prone to giving a triple bottom sell signal than giving a quadruple buy signal, but the stock still has to drop to $32 to complete that.
La-Z-Boy Point and Figure Chart
Reclining in a La-Z-Boy, watching football, eating pizza, and drinking cold beverages. That's the type of furniture I was looking for. But I passed, and investors have been passing on La-Z-Boy (LZB) lately. The stock is still trading on a buy signal that has been in place since January, and the bullish support line is still in place, but LZB is getting very close to breaking both. That the story for furniture stocks - the couch hasn't broken yet, but I'm starting to hear some creaking.