If you visit a mall or retail store these days you will be bombarded by hoards of frantic shoppers. People are expected to pay as much, or more, on gifts this year than they did last year. This creates wonderful opportunites for traders! Find and trade those retail stocks that will see the biggest benefit from holiday shoppers and you can pay for your holiday gifts from these trades.
Not all retail stocks are worth trading. Some are slow moving and will not give you the returns that make the trade worthwhile. The retail stocks you want to trade are those with a lot of volume and enough buying interest that they will move as we head into the heavy buying season.
I determine which retail stocks to trade by going into the Stock Sector Tree in Trade Navigator. The Stock Sector Tree lists the sectors, sub-sectors and the stocks within each sub-sector.
As you can see above, there are 25 sectors in total and the Retail sector is comprised of the following eight sub-sectors:
Apparel Retail Technology Retail
Department and Discount Retail Specialty Retail
Drugs Retail Catalog and Mail Order Retail
Grocery Retail Home Improvement Retail
These retail sub-sectors contain about 236 stocks. Since I am trying to take advantage of holiday gift buying I focus on five sub-sectors; the Apparel, Department and Discount Retail, Technology, Specialty and Catalog sub-sectors. I want to find the best stocks to trade within each of these five sub-sectors. I do this by sorting the stocks within each sub-sector by volume dollars in descending order. This means that the stocks with the highest volume dollars are at the top of my list. And those stocks with the highest volume dollars are easily traded with a proven technical analysis system.
From early October to mid December I look through my five retail sub-sectors to find the stocks that are moving during the holiday season. As you see below in the Department and Discount sub-sector, KMart (KMRT), WalMart (WMT), Sears (S), Target (TGT) Kohls (KSS), and Federated Department Stores (FD) have the highest volume dollars.
I review each of the five sub-sectors and pull out the top five or six stocks within each sub-sector and create a retail watch list of stocks. I then apply my technical analysis trading system to determine when then best buying opportunities present themselves.
Try this easy way to find the strongest retail stocks to trade. And while you do your holiday shopping you can smile knowing your trades on the retail sector are paying for your gifts!
If you would like to learn more about technical analysis and profitable entry and exit points, join me in one of my free online trading seminars or come see me live in my informative and exciting two days seminar "Technically Speaking". Hope to see you soon!
