Excessive-end retail shares are exhibiting indicators of extra upside
Pedestrians pass outside a Nordstrom Inc. store in the Midtown neighborhood of New York on March 20, 2020.
Gabby Jones | Bloomberg | Getty Images
High-end retail stocks have rallied in recent months and recent trading activity could signal more upside potential on the horizon, CNBC’s Jim Cramer said Tuesday.
“The non-essential high-end retailers are already active, but the charts interpreted by Bob Lang suggest that Capri Holdings, Tapestry, LVMH and Nordstrom could all have more advantages here thanks to the stimulus checks.” “Mad Money” host said.
Lang, the founder of ExplosiveOptions.net and a contributor to TheStreet.com, is a trusted technician that Cramer relies on for research into the market.
Cramer noted that last year was the largest period of retail failure in history as coronavirus bans and restrictions weighed on the brick and mortar retail landscape.
As the US conducts its Covid-19 vaccination campaign and approaches a full economic reopening, those companies that have survived the damage could benefit from another round of aid spending that includes a third distribution of direct payments to most Americans.
“This whole group ran out of gas a few weeks ago, then Congress agreed to pump in $ 2 trillion [the economy] and now they look higher on another leg, “said Cramer.
- Parent company of Versace, Jimmy Choo and Michael Kors
- The stock is up 38.4% over the past three months and is up 7.65% on the S&P 500
- The chaikin money flow, a measure of the buying and selling pressure, is high
- The Relative Strength Index, a momentum indicator, suggests the stock is in overbought territory
“Lang believes this is the kind of stock that gets overbought, but instead of being scared, he says it will stay overbought,” Cramer said, “which means he sees it could revisit old highs . “
- Parents of Coach, Kate Spade and Stuart Weitzman
- The stock is up 51% in the past three months and is within the dollar of its 52-week high
- The moving average convergence divergence (MACD), a trend momentum indicator, has recently achieved a bullish crossover
- Chaikin The flow of money is strong
“When the stock fell back to its 50-day moving average in January, this was your chance [to buy it] … Lang thinks Tapestry is a quiet leader with more room to run, “said Cramer.” He’s more optimistic about Tapestry than I am. “
- Parents of Louis Vuitton, Hennessy and Christian Dior
- The stock is up 8.25% over the past three months, hitting its most recent high
- Has spent months trading sideways which has created a tortuous springtime situation that tends to lead to an uptrend
- MACD has made a bullish crossover, institutional investors are buying
“Lang is betting that the big boys aren’t done yet,” said Cramer.
- The stock is up 45% over the past three months
- The 50-day simple moving average crossed the 200-day moving average in December, a bullish signal
- The bullish crossover is known as the “golden cross”.
“Lang indicates that the MACD is flashing a buy signal, and it doesn’t hurt that the last quarter was spectacularly better than expected,” said Cramer. “Lang’s bet it could take a run at its peak in 2018, up about a 50% increase from here.”