This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Eight Retailers Look Right for Holidays

This column was originally published on RealMoney on Nov. 15 at 11:59 a.m. EST. It's being republished as a bonus for readers.

On Monday , I examined the retail sector and its mixed holiday prospects.

Today, let's continue the discussion and identify stocks to trade as we head into the most important time of the year for America's shopping malls.

Expect a stock-picker's market in the sector as we approach year's end, rather than a raging bull market.

It's late in the economic cycle and consumers will need good reasons to open their wallets during the holiday season.

In this type of environment, careful selection should pay off; throwing money at these stocks could be a disaster.

I'd also stick with the group leaders for now.

These stocks have risen to the top for good reasons and should continue to outperform through the holidays.

In other words, you'll do better buying lofty highs than chasing basement bargains.

Here's my watch list of the eight strongest stocks I could find in the group.

Notice how some look ready to enter right now, while others should be watched closely until key price pivots are hit.

Conn's (CONN - Get Report) is a fairly new issue, having come public in early 2004.

It's been in a steady uptrend since that time.

The stock broke out to its latest high two weeks ago, after a six-week consolidation near $29.

It's now congesting in a tight triangle pattern that may set up strong follow-through into the upper $30s.

Too (TOO - Get Report) printed a major top at $30.64 in 2002. The stock has been approaching this key level in a rising parallel channel for the last three months. Price finally reached up and tagged this old high on Friday. Look for another downdraft here and then a sharp move that carries the stock to a new multiyear high.

Jos. A. Bank Clothiers (JOSB) shows up on everyone's top 10 list. This isn't a surprise because the stock has been on a tear in 2005, rising more than 60%. The latest leg of its rally stalled in July, when the entire sector sold off. Price stabilized after a correction and is now testing the summer high. Watch for a consolidation at current levels that sets up a major breakout.

Nordstrom (JWN - Get Report) stalled out in August after a strong rally. It pulled back sharply and then charged back to the high one month later. That test failed and the stock sold off to the 200-day moving average. Price recovered once again and returned to summer resistance last week. Monday's classic triple-top breakout could start an extended run.

Claire's Stores (CLE) gapped through its all-time high earlier this month after reporting strong monthly sales. The stock now is congesting above this key level and could move sharply higher in the weeks ahead. One caution: The company reports earnings on Thursday. Smart traders will stand aside until this major news event passes.

Dress Barn (DBRN) charged above its summer high two weeks ago, reaching $29.37 before starting to pull back. This correction looks like a developing bull flag pattern that eventually will offer a low-risk trade entry. The best plan is to put this issue on your watch list and enter on a rally above the two November highs.

Chico's (CHS - Get Report) has been grinding higher in a steady uptrend for nine years. My wife attributes this outstanding performance to their quality clothing. In any case, the stock gapped up to a new high last week and pulled back immediately. It could start a strong run into the $50s once it trades over the recent peak at $44.76.

Long Drugs (LDG) rallied through its 1998 high in July and rolled over in a mild correction. It found support at $40 and started a bounce toward resistance several weeks ago. Notice how the stock has set up a basing pattern at the old high. A push over this level should trigger a quick move to the July peak. In turn, this could yield a strong breakout over nine-year resistance.

P.S. from Editor-in-Chief, Dave Morrow:
It's always been my opinion that it pays to have more -- not fewer -- expert market views and analyses when you're making investing or trading decisions. That's why I recommend you take advantage of our free trial offer to RealMoney premium Web site, where you'll get in-depth commentary and money-making strategies from over 50 Wall Street pros, including Jim Cramer. Take my advice -- try it now.

Alan Farley is a professional trader and author of The Master Swing Trader . Farley also runs a Web site called, an online resource for trading education, technical analysis and short-term investment strategies. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Farley appreciates your feedback; click here to send him an email. Also, click here to sign up for Farley's premium subscription product The Daily Swing Trade brought to you exclusively by has a revenue-sharing relationship with under which it receives a portion of the revenue from Amazon purchases by customers directed there from

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
JOSB $64.98 -0.05%
CONN $27.02 3.68%
CHS $12.35 1.65%
JWN $57.61 -0.31%
TOO $13.33 -0.52%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs