We talk a lot about the Retail sector here on Allstarcharts, and for good reason. It remains one of the most important (and best performing) industry groups in the market. We look at Consumer Discretionaries ($XLY) as a leading indicator and the retailers are one of its major components. Going into the holidays, Retailers of course, are the topic of choice. But there is much more to it than what’s on the ten o’clock news.
Arthur Hill at the Stockcharts Blog has a nice post up this morning on $XRT – S&P Retail Index:
“The chart below shows XRT bouncing off support in the 42.5 area and working its way back above 50. A rising channel has taken shape with support marked at 47.50. The bulls are in good shape as long as prices hold this rising channel. A move below 47.5 would break channel support and argue for a continuation of the summer decline. This would be a bearish development for retailers, the consumer spending outlook and the broader market.”
Down at the bottom of the chart, the key levels of RSI are highlighted in yellow. He does a great job here of marking off the upper and lower zones from how RSI behaves in bull and bear modes. Go check out the Stockcharts Blog for more details. Also Click Here if you want to learn more about how I use RSI (Relative Strength Index).
Enjoy your weekends!