Here’s why the JD Sports share price just popped by 5%

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Updated on Aug 14, 2024

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JD Sports stock price jumped by almost 5% on Wednesday.
It was the best-performing company in the FTSE 100 index.
The shares jumped after the positive results by Foot Locker.

JD Sports Fashion (LON: JD) share price was the best-performer in the FTSE 100 index on Wednesday. The stock jumped by almost 5% and reached to a high of 156.40p, the highest point since July 31st. It has soared by 26.4% from the lowest point this year.

JD Sports stock rose after the strong financial results by Foot Locker, a leading American retailer that sells sneakers, apparel, and accessories. In a statement, the company’s sales dropped by 8.6% to $1.9 billion in the third quarter. Comparable-store sales fell by 8%. These results were nonetheless better than what analysts were expecting. As a result, Foot Locker stock price jumped by over 10% in the pre-market session.

JD Sports shares rose because these results mean that the industry is doing well. Foot Locker and JD Sports are almost similar because they sell almost similar products.

They also sell in some similar regions since JD Sports is accelerating its American presence, where it has over 1,245 stores. It accelerated its US business by acquiring Shoe Palace and Finish Line.

In its most recent results, JD Sports said that its revenue rose by 8.3% in the first half of the year to over 4.7 billion pounds. Its profit before tax rose by 25.8% to over 375 million pounds, translating to an earnings per share of 4.65 pence.

JD Sports has been helped by its strong physical retail presence and its e-commerce platforms that make it easy for people to shop. It also owns several brands like Size?, Footpatrol, DLTR, and Livestock.

JD chart by TradingView

Turning to the daily chart, we see that the JD stock price has made a bullish breakout recently. Before this rebound, the stock formed a falling wedge pattern, which is usually a bullish sign.

The shares have also moved above the 50-day and 200-day Exponential Moving Averages (EMA). Also, the Relative Strength Index (RSI) has moved to the overbought point of 70 while the MACD has crossed the neutral point.

Therefore, the outlook for the stock is bullish, with the next point to watch being at 185.70p, the highest point in February. This price is about 20% above the current level.