MATTEL SHORT POTENTIALShort Mattel (MAT)Thesis: Fade the relief rally. Structural downtrend remains intact. Timeframe: 4-12 Weeks
MAT’s 40% rip over the last 8 weeks (from ~$15 to ~$21) is running on fumes. The price action is stalling at critical structural resistance, setting up a classic mean reversion play. This looks like a bull trap within a secular bear trend—buyers are exhausted, and the macro technicals are heavy.
Technical Catalyst
The "Death Cross" Ceiling: The 50-week SMA ($18.73) is trading below the 200-week SMA ($19.50). While price briefly poked above the 200-week line ($20.07), it lacks conviction. A weekly close back under $19.50 confirms the fake-out and likely accelerates selling.
Rejection at Supply: The stock can’t clear the $22.06 breakout level. The recent high of $21.15 failed to even test it, and we’ve seen subsequent lower weekly closes ($21.15 $\to$ $20.21 $\to$ $20.07). Demand is drying up.
Momentum Roll-Over: RSI hit scorched-earth levels (~73) and has already hooked down to 64. Volatility is ticking up (0.40) as the bid softens—typical behavior at a local top before the floor drops out.
The Trade Action: Short the bounce. Entry Zone: $20.00 – $20.50 (Fade intraday strength).Stop Loss: $22.15 (Hard stop. A close above this breaches multi-year resistance and kills the thesis).Target 1: $18.75 (Revert to 50-Week SMA).
Target 2: $16.60 (Trailing Support / Origin of the rally).
Risk Factors Invalidation: A sustained weekly close > $22.10 signals a structural trend shift.
Seasonality: Q4 holiday data could provide a temporary fundamental tailwind, but the technicals suggest this is already priced in.
