Retail Bubble Stocks Are Vulnerable
The stock plunged to $59.23 at Monday's low, down 21.9%, after the household-goods retailer issued a cautious outlook even as it reported better-than-expected first-quarter earnings.
The stock was taken to the woodshed after the company told investors it was using more coupons to entice consumers to shop, and that this policy was hurting profitability.
The stock's plunge from the all-time high was to less than its 200-day simple moving average at $63.49.
My semiannual value level is $55.81, with a quarterly pivot at $63.60 and a monthly risky level at $71.89. "Buy and trade" investors could have reduced long positions at $71.89 before the disappointment.
Walt Disney ($46.70) traded to an all-time high at $48.00 on June 19.
This stock remains overbought on its daily chart and is vulnerable to bad news. My annual pivots at $44.04 and $40.18 had been magnets during the first five months of 2012 and could be tested again.
Disney could still see another all-time high if the stock takes out my weekly pivot at $47.64. "Buy and trade" investors should consider entering good-'til-canceled limit orders to sell strength to my monthly risky level at $51.49.
Family Dollar Stores(FDO) ($70.18) traded to an all-time high at $74.73 on June 14. If you look at the stock's monthly chart you see a parabolic bubble, which is hard to justify with consumer confidence this low.
If the stock closes at less than its 50-day simple moving average at $68.03, the risk is to the 200-day moving average at $59.50. My semiannual value level is $60.20 with weekly and quarterly pivots at $68.77 and $67.95, respectively, and a monthly pivot at $71.72. "Buy and trade" investors had the opportunity to book gains at my monthly pivot at $71.72.
Dollar Tree(DLTR) ($109.54) traded to an all-time high at $113.64 on June 20. The monthly chart for DLTR also shows a parabolic bubble. The 50-day simple moving average is a support at $102.65. The 200-day lags at $88.52. My weekly and monthly pivots are $106.51 and $107.17, respectively.
TJX Companies(TJX) ($42.44) is another retailer gone parabolic, setting an all-time high at $43.78 on June 21.
If the stock closes below its 50-day simple moving average at $41.56 the risk is to the 200-week moving average at $34.95.
Holding my weekly value level at $42.02 could yield another all-time high as my annual risky levels are $45.75 and $52.67, where "Buy and trade" profits are justified.
Under Armour(UA) ($97.19) set an all-time high at $107.86 on June 19.