Believe It Or Not, Retail May Be Ready To Bounce
InTheMoneyStocks.com | May 24, 2017 12:59PM ET
Retail stocks have been trading lower since April 2015. Back then, the SPDR S&P Retail (MX:XRT) (ETF) XRT was trading around $51. Today, the XRT is at $40.44 a share. Clearly, the trend is down for the retail sector. Amazon.com's (NASDAQ:AMZN) growth and business model has been the leading catalyst for the decline in most of the leading retail stocks. Amazon stock has soared higher since April 2015, gaining more than $500 in share price since then. Currently, AMZN is trading at $974. So far, most leading retail companies have not found a way to combat Amazon's retail dominance.
So does the retail sector have a bottom in place? Believe it or not, it does. Traders should continue to look for near-term weakness in the XRT until $38.75, which is a level that is signaling major support and institutional sponsorship. Remember that only the strong survive and retailers will have to adapt to the Amazon business model or face demise. I'll take a closer look at most of the leading retail stocks when the XRT trades down to $38.75.
It may be time to look for a bounce in many of these beaten-down equities in the retail sector.
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