Would anyone buy stocks in the retail sector?

Discussion in 'Trading' started by Happy Hopping, Nov 9, 2010.

Would you buy stocks in the retail sector?

  1. Yes

    2 vote(s)
  2. No

    1 vote(s)
  3. Undecided

    1 vote(s)
  1. Would any1 of you go for dept. stores, clothing co., or household appliance co. with S&P currently sitting at 1223? If so, please state your logic
  2. NoDoji


    ANF, JCP, and TIF all have high short interest, so you might want to buy new highs on those for the breakout squeezes.
  3. why would any1 buy in on new high? S&P has clearly top out. AT this recessionary environment, I won't buy anything.

    ANF is high short int. because teenage unemployment is at 25% high. So who's going walk into ANF and buy things? To make matter worse, ANF has to watch for teens to steal their stuff more so than an average stores, because only teens hang out at ANF. As teens don't have $$ to buy them, they'll steal them. And they are underage, you can't prosecute them
  4. NoDoji


    I'm guessing you are somewhat new to trading. The reason why it's a low-risk/high reward trade to the long side when a stock with high short interest hits a new high is because a) that's where all the shorts' stops are and if the breakout is for real, they will have to buy shares to cover before the loss gets too big and this drives price further, and b) big money buys/adds to positions on breakouts to new highs.

    So as soon as price ticks to the new high, breakout traders and trend followers are entering/adding to positions and the shorts' stop loss orders are triggered, turning them into live market orders which then drive price at least far enough that the breakout traders can bail out of the position at or near break even if the breakout occurs with no follow-through (failed breakout). If that happens, it's likely just a stop run and the big money will then sell into strength. So if you buy the new high, it runs a small way and retreats quickly, you can exit the position with little risk and reverse to a counter-trend short position.
  5. In that case, at what percentage range is consider as a highly shorted stock?
  6. emg


    here are the lists to avoid buying and i think they will bankrupt soon:

    jc penny
    phillips-van heusen

    here are the lists to buy:

    or any discount retail stores
  7. NoDoji


    I'd look for 10% short interest or more.
  8. dtan1e


    i like sears, gap, van heusen, hate walmart