Mattel, Inc. (MAT) shares fell more than 6% on Thursday after a disappointing investor day event. According to D.A. Davidson analysts, who downgraded the stock to Neutral with a $24.00 price target, Mattel's uninspiring investor day failed to provide specifics on how the company will execute on its strategic plan in the near term. The analysts also came away with the conclusion that the Thomas & Friends and Mega Blok brands were struggling.

The significant decline marks the third time in a year that the Mattel shares have gapped significantly lower. On April 21, the stock moved sharply lower after reporting first quarter revenue that slipped 15.4% to $735.6 million – missing consensus estimates by nearly $70 million – and a net loss of 32 cents – missing consensus estimates by 15 cents per share. The company also failed to meet analyst expectations during its fourth quarter financial results on Jan. 25. (See also: Mattel Tanks as It Slashes Dividend to Fund Turnaround Plan.)

Chart showing the year-to-date performance of Mattel, Inc. (MAT) stock

From a technical standpoint, the stock broke down from trendline support at around $22.00, past S1 support at $21.73, to near its S2 support at $20.54. The relative strength index (RSI) has slipped into oversold territory, which could suggest some near-term consolidation. However, the moving average convergence divergence (MACD) appears ready for a new bearish crossover, which could signal a prolonged bearish trend over the coming sessions.

Traders should watch for prices to hold the S2 support level and potentially rebound higher, while maintaining a bearish bias to any positions. With a history of disappointing earnings results and an unclear investor day, the company's long-term fundamental picture also remains uncertain. The upshot is that the company could face increasingly pessimistic expectations, which could set the stage for easier-to-obtain upside surprises. (For more, see: Will Mattel's Strategic Growth Plan Aid a Turnaround?)

Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.

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