Housing On Deck:
The builder space has seen a nice response as of late to the softness in interest rates. I have said that I would like to see some plain old generic buying on no news. That may be beginning to happen, as the stocks have continued to bounce despite the roughly 20 basis point rise in the 10 year yield. Below is the weekly chart of DHI and notice a huge double bottom base has taken shape (it REPORTS earnings on 4/25 before the open). The longer the base the greater the space on the confirmed corresponding breakout. This pattern is 16 months long, and a move through a 47.01 pivot could see this name give shelter for an abundance of bulls going forward.
The leisure space is acting firmly as of late with names like PLNT flexing its muscles, pun intended, and up nearly a double in the last one year period. Gaming plays like LVS, which is on a 3 week winning streak up 12% in the time frame and pays a handsome 3.1% dividend yield is another example. Below is the ratio chart of two names in the outdoor space, and notice how one is clearly outshining the other. Looking at both on a one year look back period WGO has lost 3%, not a great sign, but CWH has declined 47% over the same period. I am not a fundamental investor at all, but I believe Marcus Lemonis who is the CEO and the main actor on the CNBC show The Profit, has weighed this name down with debt, something he completely abhors on the show. Hmmm.
When stocks underperform not only a strong group, but an overall market as well your antenna should be perked. The jewelry space is not a crowded one, as SIG bought Zale’s more than 5 years ago. Below is the SIG chart and how it appeared in our Discretionary Report on 4/9. The name is now 68% off most recent 52 week highs, not a typo, and this week is off more than 3% so far, AFTER the prior 2 fell by nearly 15%. Perhaps it is better to compare the performance of its chief peer TIF. TIF is up 31% in 2019 thus far while SIG is DOWN 29% YTD. Glitter is not blinding at all.