The Consumer Discretionary Sector still hasn’t made new highs like most of the other sectors, but the last few weeks show a significant move in the sector. It’s always easy to run to the big names, but here are four small cap retailers that exploded recently and might just be getting started. Look for an entry that suits your trading style, but most of them need to pause or pullback some. Add them to your watch lists to find the best entry.
First of all, Stage Stores started kicking it up a few months ago when they announced they were moving to a discount store strategy. Recently, they announced they would become an Amazon pickup location. The investors liked the news and have changed the trend from down to up. Earnings are out of the way with the recent report on November 21.
Not much to discuss on the chart. It is climbing off significant lows in August and now up 10-fold! I would expect some buying exhaustion and use a shorter-term chart for a better entry.
The next stock is Buckle. Buckle has been oscillating mess for a while, but over the last few months it has started climbing out of a rounded bottom and is starting to attract more investor attention. Hitting new 52-week highs was nice but the last 2 weeks also produced multi-year highs. On the big annual picture, we now have a series of higher lows and higher highs.
The SCTR Ranking rates the stock against its small cap peers looking for the strongest price action. This stock can run for a while with strong price action. Earnings were on November 22.
Chico’s is breaking out of a 6-month base and is starting to accelerate higher after a significant downtrend.
Rolling through the indicators, the SCTR is pushing up into the 90’s suggesting the stock is one of the best performing small caps right now. The PPO is moving back into positive territory for the first time in 2019. Earnings were announced on November 25th so this looks like a power earnings move higher.
Another stock making a big move this week in the apparel space is Citi Trends.
The stock is another small cap, but the price action this week shows the stock breaking out of a base and a long down trend. Over the last few months, the stock trended sideways, but this week it confirmed the change in trend by adding higher highs.
The SCTR is just moving above 75, which is a nice clue the price action might be changing. Notice it is the first time in a year since it is up there! The PPO is also moving into positive territory as well. Citi Trends announced earnings on November 25th.
The fact that this small cap apparel group is starting to accelerate at the same time is helpful. It is supportive when a whole industry group starts to move. There are lots of retail wrecks out there right now but these are starting to look like they could lead a run into the spring.