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Retailers - Good, Bad and Ugly

Retail Stocks and the Chaikin Power Gauge Rating

In a market where stock picking has taken a back seat to ETF investing, the Chaikin Power Gauge continues to provide a guiding light for investors buying individual stocks.

Over the past 6 months the Power Gauge ratings on stocks in the retailing sector have differentiated stocks with positive potential from those with negative potential.

While encouraging investors to buy Macy's (NYSE:M), CVS (NYSE:CVS) and Ross Stores (NASDAQ:ROST)
the Chaikin Power Gauge ratings has been consistently bearish on Tiffany (NYSE:TIF) and Urban Outfitters (NASDAQ:URBN).

More important than the profits which have resulted and the losses avoided are the way those losses are sustained.

Stocks with a negative Power Gauge rating are more likely to experience unpleasant surprises which result in large gaps down in overnight trading. These gaps mean that investors can't get out of these stocks until the damage has been done.

There are 2 painful examples of that in the past two days: $TIF and $URBN. Tiffany reported weak holiday sales figures and gapped down 10% while $URBN had it's CEO resign last night and is down a whopping 16% before the opening.

On the positive side analysts continue to raise their earnings estimates and price targets on $M as the company maintains both sales and stock price momentum.

Bad news comes in bunches and good follows good in the stock market.

Take some of the worry out of your investments by using the Chaikin Power Gauge rating to filter your investment ideas and help you find the winners and drop the losers before they explode in your portfolio.