Abercrombie & Fitch (ANF) has seen an impressive increase, with its stock price rising more than 100% since November 24. This climb mainly consisted of just six small dips. On Monday, the stock hit the bull flag target of $130.33, a level predicted by a pattern developed in early December. After this jump, the stock seems overextended, suggesting it might either pull back or stabilize before reaching the next resistance at $143.54. Profit-taking could create minor support around $122.72, with stronger support at $117.03. A critical point to watch is the older declining trendline near $110.00. Staying above this level is essential to keep the current momentum against short-term selling pressure. The stock’s incredible 100% gain since late November 2025 reflects strong fundamentals and overall market confidence. This strength is backed by the company’s impressive Q3 2025 earnings report, showing a 15% increase in comparable sales. Now that the stock has reached the $130 target, we need to be careful as the rally appears to be stretched. With the stock looking overextended, one strategy is to buy put options for late January or February 2026, targeting strike prices close to the $120 or $115 support levels. The VIX has been low around 13, making options relatively cheap for a bet on a short-term decline. A safer approach could be selling a bear call spread above the recent highs, which would profit if the stock simply stalls or drops from here. For those who think the strong trend might continue, we should keep an eye on potential dips to support at $117.03 or the crucial trendline near $110.00. These levels offer a chance to sell bull put spreads, allowing us to collect a premium while anticipating that these key levels will hold into the new year. This strategy helps us manage risk while waiting for the stock to stabilize and prepare for its next upward move. In the past, we’ve seen similar sharp rises in stocks, particularly tech stocks in 2023, often followed by a period of consolidation or a 15-20% drop. How ANF’s price reacts at the $117 and $110 levels will be crucial for deciding our next steps. These support zones will determine whether we see a simple profit-taking dip or a more significant trend reversal.

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