Stock chart patterns and technical analysis (TA) explained simply. Disclaimer: This blog and all its contents are for educational and entertainment purposes only. Do not trade or invest based on any information seen on this blog. Please read Terms of Service. The K E Stone blog sites (Keybot the Quant) are blacklisted by Google, so enjoy the ad-free experience, and only use the Donate button when supporting the sites.
The retail sector should put on quite a show this week. We watched the November negative divergence set-up that ushered in two weeks of great downside action. Here we are again. A two-year rising wedge, even a rising wedge over the six-month time frame. The stochastics are overbot. Negative divergence exists across this chart as shown by the blue lines for the indicators as well as on the daily chart. Last week prints a hanging man (red circle) which typically indicates a trend change, but you have to look for follow-thru verification this week.
Adding it all together, retail is ripe for a big fall. It should be spectacular to watch. Possible catalysts would be the Consumer Credit data at 3 PM today, or the NDN earnings tomorrow, but most importantly the Retail Sales numbers on Thursday morning. We may see rats exiting the sinking ship, er, store. Retail will be one of the most, if not the most, interesting sector to watch this week and the charts show that it is headed for a serious fall. GS downgrades TJX this morning so the retail bears smile. This information is for educational and entertainment purposes only. Do not invest basded on anything you read here. Consult your financial advisor before making any investment decision.
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