Can the bifurcation of the two most popular retail ETFs be explained by a single stock? The case can logically be made with the XLY currently trading just 1% off most recent 52 week highs. The performance of the XRT is a far cry from that, now lower by 16% from its most recent peak. The starkly different compositions of the funds has a lot to do with it. AMZN carries just a 1.3% weighting in the XRT, while the tech behemoth represents nearly 24% of the XLY. AMZN has run nearly 600 handles from the late December lows, and there could be a very valuable moral to the story. Concentration works better than diversification, when one has the right stocks.
Builders Momentum Building:
The ITB just enjoyed its first 4 week winning streak last week, for the first time since late December ’17 to early January ’18. The ETF has lost ground just 3 times in all of April so far, and the 4/2 session was lower by a whopping 2 pennies. DHI its largest component at more than 14% is in the midst of a 16 month double bottom base. LEN recently broke above a cup with handle base, with the trigger aligning with the very round 50 number. Below is the ratio chart of the ITB compared to the S&P 500, and its strength shows no sign of stopping with interest rate weakness a tail wind.
Name changes rarely go over very well. Often it is an attempt to rid oneself of a poorly run company or reputation. Of course there are exceptions to every rule, and the Alphabet name change has been pretty good (AAXN from TASR not so bad either). Below is the chart of TPR and how it appeared in our 3/5 Consumer Report. The former COH now trades 45% off most recent 52 week highs in a thriving overall market environment. It has lost ground 8 of the last 11 weeks and this week is off to another rocky start down nearly 6% already. This stock is now below its December lows and is challenging the March lows here too.