Most investors thought retail was dead at the start of the year… Then, the pandemic dealt what looked like the final blow.

After all, the worst thing you can do for a struggling brick-and-mortar store is force folks to stay home and order more stuff online. But that’s exactly what the retail industry faced this year.

Retail isn’t dead yet, though. And today, I’ll share a “dog” of a stock that’s starting to wake up…

The stock is down roughly 70% over the past five years. It took a hard hit from the coronavirus as well, falling more than 25% this year alone.

But history shows us that this poor performance could be coming to an end… And a 34% rally could be underway.

Let me explain…

Under Armour (UAA) is a premier sports-equipment retailer. It made a name for itself by reinventing athletic apparel and footwear.

Importantly, the company’s stock has been crawling back from its May lows. And it recently staged an important breakout.

The stock rallied seven days in a row last month. That’s a rare feat that points to more gains ahead.

You see, a string of consecutive up-days is like a bright green light. It’s a signal that an investment is picking up steam… It means the uptrend is strengthening.

Under Armour is no exception. Since 2005, similar instances have led to winning trades in this stock 82% of the time over the next year. And they can lead to big outperformance, too.

The company is coming off one of those hot streaks right now. Again, the stock rallied seven consecutive days last month – and it has continued higher since. Take a look…

The chart shows the collapse in the stock earlier this year. But you can also see Under Armour is bouncing back strong. And the stock is coming off a breakout run.

Now, Under Armour has been a poor performer over the last five years… But its long-term track record is fantastic. The stock has returned about 15% in a typical year since 2005.

And buying after this kind of move higher often leads to even bigger gains. Similar instances have led to 34% gains over the following year… more than double the stock’s typical one-year return.

If history is any indication, Under Armour’s shares could soar in the coming year.

Of course, that’s a major contrarian bet. This is a struggling company in a struggling industry. And the headwinds for retail may not be over yet.

But history is clear on this one. The trend is moving higher… and it’s strengthening. That makes this a stock you should consider now.

Good investing,

— Chris Igou

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Source: Daily Wealth