As we enter another week of fear, it is important to keep ourselves focused – the market is fickle and moves can be profitable if we are prepared. One area to consider this week is retail..
Consumer spending accounts for 70% of all economic activity in this country – of which, retail sales account for one-third of that. That’s about all you need to know about this week from the economic calendar. Since the numbers will be out on Friday, it gives us four full days of trading.
What Retail Sales is:
Survey of retailers that provide goods such as food, clothes, cars, department stores, etc.
What it isn’t:
Doesn’t reflect money spent on services – travel, medical care, insurance, movies, haircuts, etc.. even though service spending accounts for the other two-thirds of personal expenditures.
So, what are we looking for this Friday?
Retail Sales – 0.4 % (no change from April)
Retail less autos – 0.2% expected to be lower than April
A lot can change in the trading world before Friday, but I’ll look to swing or scalp some good retail names IF the number beats expectations. If we see weak numbers, then we may experience another sell-off Friday.
Here are a few names currently on my retail watch list – don’t forget, the market is crazy right now and any position we take should be followed with stops, fewer swings and profit taking.
LIZ sitting on trendline support.
ZQK – follows overall market direction more than some other retailers. We’ll need market to move this week to help it out.
JNY – Possible swing entry on SMA200. We’ll need a stop just below – next leg down target near $15
JOEZ is swingable above 2.35. Below 2.35 could create more sell pressure. Needs volume to be a good scalp play.
NKE bounced off medium strength support at SMA100. If we’re down most of this week, look for NKE to try and find some support in the $66 range. A buy here (at SMA100), would possibly be swingable if price remains above $69.
GPS – Watch this action along 20.51. If it holds, we may see some buyers. If GPS moves up this week, you’ll see buyers above 22.20. Might be a good swing from there.
AEO – One of the most oversold in the apparel sector – I would like to see it above $12.4 before swinging.
LTD – Great looking bull chart. Yes, it’s pulled back with the others, but bounces very well off trendline. If we see continued downside in the market, watch action in LTD at SMA100.
PSUN – I’m not impressed with PSUN stores and am therefore not going to play here. Does offer possible scalp opportunities, but there are better trades, in my opinion.
CVS – I don’t understand the drug retail outlets fall as of late other than just the herd mentality. If we see stability this wee, CVS is the best of the bunch, so an entry around $33.02 looks ok. Again, we MUST see market strength or at minimum, stability.
PIR – Another good looking bull chart over the last 6 months. Watch for possible entry along trendline near SMA100.
BBY is still the best electronics retailer outthere, so watch for market direction. Chart is broken down, so I’m not likely to play this week.. just one for a market pulse.
TJX – I like this stock, but want a pullback to $42.00
Let’s keep an eye on retailers this week and see what kind of adjustments we’ll need to make headed into Friday. If I play any of these before Friday, I will NOT hold over night Thursday into news.
See you in the Boom Factory.
