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Discount Retailer Recovery Opportunity?

|Includes: COST, DLTR, FDO, 99 Cents Only Stores (NDN), TGT, WMT
Market Summary Last Week & Ahead

The US industry report came in with higher demand and profits giving support to a possible improving economic recovery. China asked for forex reserve shift and the Dollar headed lower. China and Korea came in last week with stronger than normal growth reports. The VIX volatility indicator has been falling of late. Is it a sign of good or bad times to come? Be prepared so at least your portofolio does not experience possible bad times.

Major Market Moving Economic Reports this Week

Tuesday US October Consumer Confidence.

Wednesday German Consumer Price Index, New Zealand Business Confidence and Interest Rate Decision.

Thursday Japan Interest Rate Decision, German Unemployment Change, Canada Raw Materials Price Index, USA Gross Domestic Product Price Index, and Tokyo Consumer Price Index.

Friday French Producer Prices.

My Stock Pick This Week

Is a buy long position on a US budget consumer goods retailer. This discount retail store chain reported a 2.3 percent increase in comparable store sales for the second quarter, but total sales lagged Wall-Street estimates as the company closed one-third of its stores in Texas. The S&P Retail Index headed up a little lately. We would prefer to be buyers at a little lower prices from here. Possibly there is good support in the l11 area with the idea that earnings for the company in the 4th quarter could show some gains as the holiday season starts. If the broad market keeps heading higher, that may provide more support to an increased share price. One point of caution is that it’s got a low 40’s PE ratio. On a positive note the closing of one-third of their stores could be a help. Discount is the theme these days. They have the a potential to outperform near term, but their recent decline since the beginning of August needs to reverse here now to be a winner moving forward.

Buy Long 99¢ Only Stores – Ticker NDN

Buy Entry: 11.47 to 12.70

Stop-Loss: 10.75

Take Profit Areas: 13.68 to 14,66, 15.53 ti 16,75m 17.37 to 18.73

99¢ Only Stores Company Profile

99¢ Only Stores sells consumer products through its retail stores primarily at price points of 99.99¢ or less in the United States. Its stores offer consumer goods and closeout merchandise. The company also sells merchandise through its Bargain Wholesale division to retailers, distributors, and exporters. In addition, it develops private label consumer products; and imports merchandise in product categories, such as kitchen items, housewares, toys, seasonal products, pet-care, and hardware. As of June 9, 2009, the company operated 271 retail stores with 200 in California, 34 in Texas, 25 in Arizona, and 12 in Nevada. 99¢ Only Stores was founded in 1965 and is based in the City of Commerce, California.

Click here to review and trial the Trading Software we used in determining our buy long position on NDN.

Click the 99 Cent Stores Stock Chart for a larger view.

99 Cent Stores Stock Chart

Disclosure: Going long per trade plan above.