The holiday shopping season is over, but some retail stocks and exchange traded funds are surging to start 2019. For example, the SPDR S&P Retail ETF (XRT) is up nearly 7% to start the new year and some technical analysts see encouraging signs on the charts of some retailers.
Strength in XRT could be a sign some brick-and-mortar retailers are weathering competition from online rivals. The drop in brick-and-mortar sales last year wasn’t a steep drop-off from 2017 as consumers still use physical stores to purchase items they know are in stock or want to view an item prior to purchasing it online for a better price.
“Craig Johnson, chief market technician at Piper Jaffray, believes that the retail move is ‘a bounce that we can trust’ and thinks that the retail-tracking ETF (XRT) could actually return to a key level in the charts,” reports CNBC.
While XRT remains more than 17% below its 52-week, the equal-weight retail ETF is 15% above its 52-week low. The fund is also just 2% below its 50-day moving average, indicating it could just be a matter of days before XRT reclaims that line,
Important Levels
“The XRT’s 200-day moving average currently sits at around $47.53. This means Johnson believes a 9 percent rally is possible, which would take retail back to mid-November levels,” according to CNBC.