By Gareth Soloway on October 8th, 2010 1:27pm Eastern Time
Retail stocks have seen a mega surge in the past month on the back of hopes a domestic recovery is well underway. Fears of a double dip recession are a distant memory and back to school sales were solid. Just yesterday, retail sales were reported by many retailers with positive news across the board. Stocks like Abercrombie & Fitch Co. (NYSE:ANF), American Eagle Outfitters (NYSE:AEO), Macy's, Inc. (NYSE:M) and J.C. Penney Company, Inc. (NYSE:JCP) have all had meteoric rises. Just as an example, look at Macy's. On July 19th, 2010 the stock hit a low of $16.93. Today, the stock hit a high of $24.50, nearing the 52 week highs of $25.25. This is a 44.70% move. In addition, after word hit the streak that famous Bill Ackman of Pershing Square Capital was taking a 16% stake in JCP, the stock hit a high of $33.88. Just a little over a month ago, this stock was trading at $19.42. That is a meteoric rise of 74%.
Whether you understand how the market works or not, these stocks have had a run for the ages and are due for a short term pull back. In addition, always remember, stocks top on the best news and bottom on the worst news. Yesterdays retail sales and the Ackman news today would be considered the best of the best and comes when these stocks are hitting their highs. By the way folks, I hope no one is fooled thinking he bought yesterday or today. He loaded the boat a long time ago and could even be selling into this surge. To many amateurs get caught up in Wall Street shenanigans. Learn the tricks, do not be fooled and become the sheep. To gain more insight, find out what the pro's are swing trading and get proprietary education, join the Research Center.
Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
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