HOME DEPOT LEADS STRONG RETAIL BUYING
MARKING UP RETAIL... Retail stocks are having an especially good day. Chart 1 shows the Retail Holders (RTH) jumping impressively over its 50-day average today on rising volume. Percentagewise, it's one of the day's strongest groups. The relative strength line bottomed in early August after months of underperformance. That also shows that new money is starting to move back into the retailing group.
Chart 1
HOME DEPOT... Home Depot is one of the biggest holdings in the retail ETF and is also has one of the best chart patterns. Its daily chart shows the home improvement leader trading at a new five-month high after recently breaking through its summer high. Its relative strength line has also been climbing impressively since early August. The weekly bars in Chart 3 are also encouraging. They show that HD has been in a holding pattern since last October during which time the stock underperformed the S&P 500. Its weekly relative strength line, however, is climbing again. The stock appears headed for a challenge of the top of its yearly trading range at 38.
Chart 2
Chart 3
MORE RETAIL LEADERS... Three other retail leaders are shown below. Lowes Companies is breaking through its 50-day line today. Walgreen, which has been consolidating just below its 52-week high, is doing the same. Kohls is breaking through its June high. Other retailers that are jumping today are Best Buy and Gap.
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