A look at the Retail Sector...

There is a lot going on in the Retail Sector today.  Here are three things that stand out...

First, take a look at the XRTs.  They have fallen almost -10% in just two weeks.  Today they are trading right around the $38 level.  This level was pretty much the precise low in January and February of 2016, so there is a chance that they rally off of these levels.  If you are considering going long, a possible strategy would be to wait until the downtrend line gets broken and to buy it on the way up. 

I think that most investors, both professional and amateur, want to catch the exact bottom in a situation like this.  This comes for from the desire to prove to oneself (and others) that they are smart.  It isn't really about making a profit.  The risk / reward dynamics are much better if patience is utilized and trade entry is delayed until the downtrend is broken and the trade is entered after an uptrend forms,

XRT US Equity (SPDR S&P Retail E 2017-08-18 12-42-47.jpg
XRT US Equity (SPDR S&P Retail E 2017-08-18 12-47-57.jpg

 

Second, Footlocker is down -27% today after missing earnings estimates.  It has fallen over -50% this year and is trading around $35 today.  I would stay away from this one...but if it gets down to the $31.50 level I would consider buying it on a rebound because these were the levels that were the lows in 2012 and 2013.

FL US Equity (Foot Locker Inc) L 2017-08-18 12-54-58.jpg

 

Third, Ross Stores is actually trading up.  However, it is overbought and well off it its highs.  If $58 breaks to the downside it will probably fall back to $56, which was the top of the range for the first half of this month.  It is currently trading around the $58.50 level.

ROST US Equity (Ross Stores Inc) 2017-08-18 13-13-14.jpg