Sneaky Retail Smarts on The Street

With the recent mechanical and liquidity issues the market has experienced during this correction, an initial thought would be that the retail stocks would quickly relinquish a chunk or all of the relief rally the sector has enjoyed of late, rallying after quarters of end of largely getting pummeled. After all, plenty of retail firms still have debt issues and it remains to be seem if they can continue to survive, let along thrive, in an Amazon world. 

On the contrary, though, as some of the best relative standouts in recent sessions can be found in retail, as the sector continues to flash signs of outperforming on at least a relative if not absolute basis. 

The extremely heavily-shorted, if not controversial, Wayfair, below on its daily timeframe, is a pretty good example of this retail dynamic. 

Again, we would think that W would fold up like a cheap suit during a market correction, with prominent short-sellers taking to financial news media to gloat about their long-awaited bearish thesis coming to fruition. 

Instead, Wayfair has does nothing thus far but bull flag above a prior, well-defined breakout area, in effect looking much more like an actionable long idea than anything else if the broad market snaps back. 

More on these types of ideas, as well as the broad market, in my usual Midday Video for Members.