The biggest and heaviest shopping season has started off and retailers both at stores and online are dishing out almost never-ending deals.
So far this year, Target Stores Inc. (TGT) has been on a roll. Investors who were able to buy the stock in Jan 2019
would have been treated with a solid +89% gain. Best Buy Inc. (BBY) has zoomed +52% and Costco Wholesale Corp. (COST) has jumped +47%. Clearly, these are the top 3 retail stocks in 2019.
With that stated, it is time to look at how some of the major retailers' stocks are positioned.
Target Stores Inc. (TGT)
TGT stock does appear extended after these heady gains. On a downturn in the broader market some profit taking cannot be ruled out. On a pullback to its 10-week SMA we expect stock
to find support and can provide attractive entry opportunities.
Best Buy Inc. (BBY)
BBY stock broke out this week and jumped 11% but pared some of its gains. Stock bounced off its 10-week SMA. Investors will be closely monitoring sales at this technology retailer.
We expect stock to consolidate a bit over this quarter if Black Friday/Cyber Monday sales don't meet expectations. Interestingly, stock doesn't appear extended and a quick pullback
may provide attractive entry opportunities.
Costco Wholesale Corp. (COST)
COST has been in a trading range for the past few months unable to clearly move past and stay above the $307 levels. Stock has been finding support at its 10-week SMA but
its relative strength is flattening out a bit and that's not very encouraging. The company's forays into China are in the early stages. From a technical standpoint no
attractive entry points are available at this time.
Walmart Stores Inc. (WMT)
WMT is up +27.85% for the year and the stock after breaking out of a small consolidation in late August has been somewhat sluggish. Stock is hugging its 10-week SMA line
which has flattened out a bit. Company should be hoping for a solid Black Friday turnout. We expect more sluggishness.
Burlington Stores, Inc. (BURL)
Off price retailer BURL is up +38.32% this year with a bulk of its gains coming this month after a solid breakout this week. After a gap-up breakout in late August stock fell into a multi-month
consolidation upon which the second breakout has occured. On a broader market pullback, stock is likely to suffer some profit taking which can provide entry opportunities
for new investors. At this level, BURL looks a bit extended.
Ross Stores, Inc. (ROST)
Another off price retailer, ROST is also a strong performer this year with a gain of +39.6%. Like other retail stocks, ROST broke out this week from a 7-week mini consolidation. This week's breakout
also happened on a positive reversal which is usually a bullish technical development. As the stock is hugging its 10-week SMA line, a pullback near to this line can provide
attractive entry opportunities.
TJX Companies, Inc.(TJX)
TJX has amassed a respectable +36.63% gain this year. This off price retailer stock appears to be poised for a break out which hasn't materialized yet. Stock's attempted move above
a short 4-week consolidation in the week of Nov 14th, 2019 was not successful. This is a concern from a technical perspective. In recent weeks, nevertheless, stock has found support at its 10-week SMA line.
Investors will be closely monitoring sales this holiday season. A convincing high-volume move above the $62 level, we believe, is a pre-requisite at this stage.
Amazon.com Inc. (AMZN)
This giant multi-product retailer has gained +19.9% this year and when compared to other retailers has been a clear laggard. AMZN has been struggling this year. Price is slightly below its 40-week SMA.
Its 10-week SMA line has been on a decline. These are two negatives. If AMZN continues to trade below its 40-week SMA it should find support around the $1670 level. From a technical, growth investing
stand point, AMZN is not very attractively positioned now for entry opportunities.
The holiday shopping season has just begun and there could be plenty of surprises ahead. Nevertheless, self-directed investors will need to be mindful of their long-side entry in these stocks, especially
when the broader S&P 500 ETF (SPY) has already posted a +25.76% gain for the year.
Good Luck and Happy Investing!