This make-up stock is forming a promising chart pattern, says Katie Stockton

Estee Lauder (EL) surged Monday on an analyst upgrade, confirming a technical breakout above its 200-day moving average and signaling improved long-term momentum across multiple indicators, including a significant monthly MACD upturn. This technical strength, which points to potential resistance at $80 and an intermediate upside target of $111, is further bolstered by a broader tailwind from the deeply oversold consumer staples sector, which is poised for short-term outperformance and lasting gains against the S&P 500, suggesting a sustained positive outlook for EL.

Analysis

Estee Lauder's (EL) stock has demonstrated a significant technical breakout, gapping higher on an analyst upgrade to move decisively above its 200-day moving average. This move is substantiated by a confluence of bullish long-term momentum indicators, including new upturns in the monthly stochastics and the first positive monthly MACD signal since August 2020, suggesting the recent April low marked a major bottom. The bullish outlook is further reinforced by a prior DeMARK Indicator 'buy' signal, which projected positive momentum for a nine-month period, and a weekly MACD that is approaching positive territory with a series of higher lows. From a price target perspective, the stock faces an initial resistance hurdle near $80, which is viewed as surmountable, with an intermediate-term upside objective of approximately $111 based on the weekly cloud model. The positive momentum for EL is amplified by a favorable sector-level tailwind, as the Consumer Staples Select Sector SPDR (XLP) is deeply oversold relative to the S&P 500 and appears poised for a period of outperformance based on both short-term and long-term momentum signals.

Key Decisions for Investors

• Given the strong confluence of bullish technical signals, including the break of the 200-day moving average and a rare monthly MACD upturn, investors could view the current setup in Estee Lauder as a favorable entry point for a long position.
• Monitor the $80 price level as a key initial resistance; a sustained break above this level would validate the bullish thesis and signal potential continuation towards the intermediate-term objective of $111.
• Consider the broader sector context, as the analysis suggests a potential rotation into consumer staples (XLP) given its oversold condition relative to the S&P 500, making EL a strong candidate to capitalize on this theme.
• The combination of long-term indicators, such as the nine-month DeMARK outlook and the first monthly MACD signal since 2020, implies that this may not be a short-term trade but a significant shift in trend, warranting a longer investment horizon.