During a week that seemed so positive, with many strong intraday reversals, keep in mind every major S&P sector lost ground. And the ones that “outperformed” were your defensive groups, like staples utilities and real estate that all fell less than 1%. Give credit to the XLY which did bounce off a rising 50 day SMA Friday, and on a YTD timeframe has still risen nearly 19%. Looking a bit deeper into the space, the homebuilders have been the best acting subsector with discretionary. They most likely are benefitting from a scenario going forward which sees little chances of interest rate increases, which is good not only for them, but the overall markets.
When Discount Is Premium:
Discount plays are traditionally known for their ability to thrive in downturns, but they show nice appreciation as well. Consumers have become much more savvy and have changed their spending habits. Below is a ratio chart comparing COST to BJ which recently came public once again, with the latter losing more than 4% and now sitting 17% off most recent 52 week highs. Contrast that with COST, which rose 1% this week and now trades just 1% off recent all time highs. It is higher 15 of the last 20 weeks, and this week bounced off its rising 50 day SMA for the first time since a break above a cup base pivot 240.98 taken out on 3/28, often a good entry point.
There were few shining examples of good moves within the retail arena this past week, with the exception of MCD WING and COST. Below is another name that recorded a nice weekly move, OLLI and how it was presented in our 5/7 Consumer Report. It lost ground just six sessions in all of May and is on a current 7 week winning streak and sitting at all time highs. Friday registered its first CLOSE above the round 100 number, and this name deserves plenty of your attention with its standout week, while peers struggled.