Follow The Leader?

The giant in the consumer discretionary room has now advanced 14 of the last 15 weeks, and sits in very close proximity, just 4%, from its most recent all time highs. Below is its daily chart, which shows the strong volume Friday, its largest spike in nearly 2 months, while recording a bearish engulfing candle. Two of the last 3 weeks have registered decent downside reversals to CLOSE near lows for the WEEKLY range, putting up bearish shooting stars. Will the rest of retail take its cue from this very slightly wounded general? My guess is that any correction in this particular stock will be somewhat short lived, but how will the rest of its consumer peers fare? Is it time for the little guy to make their bullish presence felt while its leader catches its breath? On a small time frame that may be already happening as on a 1 and 3 month period the XRT is besting the XLY up 2.4 and 37.3% respectively (XLY has gained .5 and 26.2%). Of course NKE, a top ten component had its issues Friday after an earnings report, but contributing more may be other large holdings in SBUX BKNG TJX each down well over 20% from their most recent 52 week highs. The golden arches are weighing too, off 19% from its February peak.

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