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Analyzing the Retail Stock Bubble

Stocks in this article: AMZNCOSTDGWMTLOW

Home Depot (HD) ($60.86) set an all-time high at $63.20 on Oct. 5 and is well above its 200-day SMA at $51.32. The weekly chart remains in bubble territory with overbought MOJO and the five-week MMA at $59.15 and the 200-week SMA at $35.15. Investors and traders should employ a "buy and trade" strategy between the value level and risky level.

Lowe's Companies (LOW) ($32.35) traded to a bubble high at $32.29 April 16, which popped to a 2012 low at $24.76 on Aug 2. Then the bubble reinflated to an all-time high at $32.63 on Oct 16. The stock at its low was below its 200-day SMA and is now above it at $28.43. The weekly chart is in bubble territory with overbought MOJO and the five-week MMA at $30.28 and the 200-week SMA at $23.62. Investors and traders should employ a "buy and trade" strategy between the value level and risky level.

Monster Beverage (MNST) ($58.42) set an all-time high at $83.96 on April 30 and is below its 200-day (SMA) at $61.79. The weekly chart shifts to positive on a close this week above its five-week MMA at $57.96 with the 200-week SMA at $33.27. This would be an attempt to reinflate the bubble. Investors and traders should employ a "buy and trade" strategy between the value level and risky level.

Constellation Brands (STZ) ($35.78) set an all-time high at $36.50 on Oct. 8 and is above its 200-day SMA at $25.05. The weekly chart is in bubble territory with overbought MOJO and the five-week MMA at $33.58 and the 200-week SMA at $18.97. I do not show a risky level at this time.

TJX Companies (TJX) ($43.10) set an all-time high at $46.67 on Aug. 29 and is above its 200-day SMA at $40.90. The weekly chart stays negative on a close this week below the five-week MMA at $44.37 with the 200-week SMA at $25.42. A negative weekly chart is a sign of a bubble popping. Investors and traders should reduce positions on strength to my weekly pivot at $43.95 and then employ a "buy and trade" strategy between the value level and risky level.

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