21Aug10:46 amEST

This Old House, No More

Between TREX (outdoor decking) and now Restoration Hardware, below on its updated daily chart, it sure seems like the market is signaling that it is infatuated with the idea of housing undergoing a revamping phase this cycle. 

On the RH chart, now how well the stock has acted since Memorial Day, with a smooth uptrend remaining unperturbed even with various spurts in broad market volatility. Perhaps what is most impressive about RH is the the fact that it remains a very heavily-shorted, if not hated, name. 

But despite the numerous shorts in the float (shares outstanding, anything more than 7-8% is considered a short squeeze play, and you can see those statistics for free on a site like FinViz.com), those bears failed to bang this stock down when they had every opportunity to this month especially during the wild market swings. 

Instead, RH has been a cool customer and, in fact, one of the very best retail performers this summer to little fanfare. 

Headed into autumn, the stock will be challenged with a September earning report. However, it is also not far from all-time highs here, a claim which many retail stocks cannot make. I am eyeing RH for a long due to its relative strength this summer as well as the possibility for a violent squeeze higher as shorts seem to be caught badly offsides now. 

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