RTH, the retail ETF, is on fire to the upside. Retail is a tough sector to trade. RTH pops over +3% this past week when it was a coin flip at the start. The new all-time record price high at 124 is on momentum so you have to see how next week pans out. Price may want to play at that upper band at 124 for a few days.
The chart is bearish despite the upside joy. The stochastics are coming off overbot levels, the indicators are in universal negative divergence, the rising wedge pattern, the upper band violation, and price extension, are all bearish indications. The middle band at 119 and lower band at 114 are on the table. That rising wedge pattern is ominous.
RTH is boosted by some very heavy-hitters such as Scamazon. The top 10 holdings are AMZN, HD, LOW, WMT, TGT, COST, CVS, TJX, SYY and WBA. Check out the RTH daily chart with the Tweezer Top (the upper tails of the candlestick are high like tweezers over the last two days). The RTH monthly chart is trying to squeeze out more juice in the short term but that chart displays universal negative divergence and is likely printing its long term top between now and spring like the broad market. Keystone does not hold any position in RTH currently.
Looking at HD and LOW, those puppies are set up sick going forward. They topped-out. Short them at will. Keystone will play HD and LOW short going forward. Home Depot and Lowe's will probably swing low into May when the spring flower season will provide a boost. However, that will likely only be a short recovery spurt and then both stocks will roll over and die. HD and LOW are excellent short candidates to play either steady, or in and out, for the remainder of the year. HD will likely lead LOW lower. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
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