According
to stock market seasonal trends, retail stocks are “supposed” to turn bearish
shortly after the holiday shopping season.
The first quarter of the New Year is typically the worst for most retailers. This year is proving to be an exception to
that rule.
Retail
stock internal momentum has soaring to higher levels on a daily basis of
late. Note the chart below, which shows
the short-term directional indicator (blue line), the short-term momentum bias
(red line), and the internal trend (green line). All are traveling in unison in a
near-vertical path. This implies the
path of least resistance for the retail stocks is still to the upside in the
near term.
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