Post-Trade Analysis: Deckers Outdoor (DECK)

Hey Traders — Mark here from the Signal Trader Pro team! Each week, we break down real trades to show how the Signal Trader Pro algorithm spots high-probability setups—and what we can learn from both the wins and the losses.

This time, we’re diving into Deckers Outdoor Corp (DECK)—the maker of the popular UGG and HOKA brands.

Company Overview: Deckers Outdoor (DECK)

Deckers Outdoor Corporation (NYSE: DECK) is a premium lifestyle and footwear company known for its portfolio of high-performance and fashion-forward brands, including UGG, HOKA ONE ONE, Teva, and Sanuk.

In recent years, Deckers has posted strong growth, led by the explosive rise of HOKA and continued demand for its iconic UGG line. The company is also praised for its disciplined supply chain, premium brand positioning, and consistently strong gross margins.

Spotting the Opportunity: Market Context & Setup

After rallying 22% off its November 2024 breakout, DECK closed at an all-time high of $223.11 on January 30, 2025, just ahead of its earnings release. The broader market was also trading near record highs, contributing to bullish sentiment.

On the earnings call, the company beat analyst expectations and raised forward guidance. However, management comments about tough year-over-year sales comparisons and low remaining inventory triggered investor concerns. The CFO flagged that both UGG and HOKA had strong sell-through, leaving little inventory to drive Q4 upside.

Despite the strong report, DECK shares tumbled 15% premarket and finished the session down 22% from the prior day’s record high. The stock had rallied so sharply into earnings that it was priced for perfection, exceeding recent 12M price targets going into the report—and any perceived softness prompted a swift repricing.

By the next day, DECK’s RSI had plunged below 30, signaling that it had gone from all-time highs to technically oversold in just 24 hours.

That’s when the Signal Trader Pro algorithm kicked in. Our Quantamental Scoring System—which combines fundamental strength with technical analysis—assigned DECK a perfect 15 out of 15. This is our highest-probability score, reserved for rare, high-conviction opportunities in fundamentally strong stocks.

We have seen situations like this many times before. If the company continues to beat the published expectations and see higher estimates then the stock will usually continue to move higher. The setup was clear.

Executing the Trade: Entry & Exit

On February 6, 2025, DECK’s RSI crossed back above 30, triggering our long entry at $172.19.

Unfortunately, the stock closed weak that day, and RSI fell back below 30 the very next session. What followed was a slow, grinding move lower—DECK hovered along the bottom edge of its 5-day moving average for nearly 40 trading days.

On April 4, 2025, shares hit a low of $95—a 45% drop from our entry, sparked in part by surprise tariff announcements that hit consumer discretionary stocks broadly.

But here’s the good news: we didn’t ride that wave all the way down.

By February 20, our alpha-based stop loss detected that the trade wasn’t progressing as expected. We exited the position with an 11% loss, well before the deeper move unfolded.

A disappointing result but it protected us from experiencing a 45% decline .

The algorithm did what it was designed to do and had us exit before things got worse—so we could reallocate capital to better setups.

STP Algorithmic Review

Each week, we highlight a key part of how the Signal Trader Pro algorithm evaluates opportunities and manages risk—by combining technical analysis with fundamental scoring.

Technical Analysis: Spotting the Right Setup

We look for strong stocks in healthy uptrends that stumble temporarily, offering high-probability entries. DECK fit that mold leading into February:

✅ Strong Trend Structure: Both the 50DMA and the 100DMA stayed above the 200DMA—indicating a well-supported long-term uptrend. (1 point for each, 2 total)
✅ Positive Momentum: DECK had a strong Year-over-Year return, a key indicator of underlying strength. (1 point)
✅ RSI Cross Over Signal: The sell-off pushed RSI below 30, triggering our oversold alert. Historically, DECK has bounced strongly from this level, and our RSI back test confirmed the high probability of a reversal. (1 point)

Because DECK scored highly across these technical indicators, it was flagged as a high-probability setup by our system.

Unfortunately, not every high-probability setup leads to a profitable trade—and that’s where our risk management protocols come into play.

Alpha Based Stop Loss Review

Before entering any trade, you need a plan for what to do if the trade moves against you—because one unchecked loss can do serious damage to your portfolio..

Losses work against you geometrically, a 10% only requires an 11% to get to break even, but a 50% loss requires 100% just to get back to where you started. That’s why taking losses quickly but intelligently is key.

But how do you make sure your exiting a stock because of a change in its underlying trend and not just a temporary reaction to broader market fluctuations.

At Signal Trader Pro, we use a dual-trigger alpha based stop loss of 10% relative to our benchmark the Russel 1000 and a loss of 10% absolute from our entry price.

Let’s review how this play out with DECK, we entered on February 6, 2025 at $172.19 and exited on February 20, 2025 at $152.55 for a loss of 11.4%. During the same time period the Russel 1000 was flat going from $334.47 to 335.77 with a small gain of less than 1%.

Since DECK lost over 10% both absolutely and relative to the benchmark, our algorithm triggered an automatic exit.

This is how we avoid turning manageable losses into devastating ones—and why risk management is just as important as trade selection.

Post-Trade Reflections: What This Trade Taught Us

This trade is a great reminder: even high-probability setups with strong fundamentals won’t always work. Markets are dynamic, and sentiment can shift quickly—even when a company is executing well.

The key is to have a system that responds decisively when trades go against you. That’s what separates disciplined traders from hopeful ones.

Even as analysts raised price targets during the decline, the only thing that mattered was this: PRICE = TRUTH.

When price action diverges from your thesis, it’s time to act—not hope.

Click here for more information and to sign up for the market’s best algorithmic trading platform, Signal Trader Pro.