Sportwear giant Adidas (GER30:ADS) has seen its shares on a downtrend over the last week and is testing support levels.
ADS – Daily Chart
The price of ADS has fallen to test the support at the uptrend line from April and further weakness here could go back to the lows near 180.
Adidas and its German rival Puma have been focused on running shoes recently as they try to regain market share from upstart brands, On and Hoka. The same shoe firms have been a drag on earnings at U.S. sports giant Nike. On is backed by tennis legend Roger Federer and is now a popular shoe for millennials.
Running is “the most exciting category for growth over the coming quarters as well as this one”, said Deutsche Bank analyst Adam Cochrane. He added that Adidas has been distracted by lifestyle shoes, opening the door to its rivals.
The company is now set to release its second-quarter earnings on July 30 and that could be a key test for the current price levels. The current standoff between the U.S. and Europe on trade is another issue as Adidas said previously that tariffs would lead to higher costs for its shoes.
The stock price is showing weakness at the support, and the earnings release in a week will be key for the near-term path.
