Retail Stocks: Should Go Down Until Just Before Christmas -- Barron's

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THE TRADER: Retail Stocks by Vito J. Racanelli

Highlighted companies: Tiffany & Co. (TIF), The Home Depot Inc. (HD), Best Buy Co. Inc. (BBY), Circuit City Stores Inc. (CC), Wal-Mart Stores Inc. (WMT), Federated Department Stores Inc. (FD)
Summary: Despite TV coverage of shoppers stampeding through malls, retail stocks were down last week; the internet group was down 7% while department stores fell 4%. According to Lehman Brothers' chief technical analyst, Jeffrey deGraaf, retail stocks tend to peak in the days that straddle Thanksgiving, then drifting down through most of December before Christmas. Generally it's better to wait until just before Christmas to play the sector; its long-term outlook is neutral. Stocks noted: Tiffany & Co. (TIF) -- showing a good technical pattern. The Home Depot Inc. (HD) -- neutral. Best Buy Co. Inc. (BBY) and Circuit City Stores Inc. (CC) -- among the weakest patterns in the group. Department stores -- look good. Wal-Mart Stores Inc. (WMT) -- mediocre. Federated Department Stores Inc. (FD) -- it reported sizzling sales last week, and if it goes down with the sector, it will be a buying opportunity in a couple weeks.
Related: November Retail Sales Disappoint; Federated and Target Are Bright Spots • More Bad Data From The National Retail Federation? • Retail Sector Has Much To Be Thankful For - Sales Up Nearly 20% • Will Consumer Woes Kill The Pre-Thanksgiving Rally? • Retail By the Numbers • Rob Black's Retail Stock Report