This morning, Wallstrip covers Limited Brands Inc. (LTD), parent of Victoria’s Secret, Bath & Body Works and Express Stores. We look at the weekly and daily charts and to see where we stand.

On the weekly charts, LTD is clearly in a pullback of the upward trend started in October of 2006. This is only the second pullback to the same trendline since the trend started and the MACD shows no divergence yet. It is not yet clear whether the down swing is over or not which would probably encourage me to stay on the sidelines for now. Wait a bit to be sure we have not seen a reversal and the start of a downtrend.

On the daily chart, we see a clean pullback to the lower channel and not far beyond that which is encouraging. In the recent days, the price has bounced off the channel line back to them 13 day EMA line which is also encouraging. But the down swing which started early in December of 2006, was emphasized by bad news on same-store sales on January 4th 2007. The current bounce back just brings us back to the pre-gap prices.

To summarize, the weekly chart shows a downtrend right now and the daily chart a slight upward movement. I would currently avoid LTD and simply wait for a clear trend on the weekly charts, either the uptrend resuming or a downtrend starting and I would wait for proper entry on the daily chart.

Happy trading!