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Analyzing the Retail Stock Bubble

Under Armour (UA) ($58.08): I originally thought that the UA bubble popped in June/July when the stock declined from $53.93 to $44.07, but the MOJO returned to a higher all-time high at $60.96 on Sept 14. The stock is above its 200-day SMA at $49.03. The weekly chart is neutral but shifts to negative on a close this week below the five-week MMA at $56.40 with the 200-week SMA at $27.57. Investors and traders should employ a "buy and trade" strategy between the value level and risky level.

Since I profiled Under Armour on June 26 in Retail Bubble Stocks Are Vulnerable the stock had a 2-for-1 split, and could have been bought at the weekly value level at a split-adjusted level of $47.90.

Wal-Mart Stores (WMT - Get Report) ($76.91) set an all-time high at $77.60 on Oct. 16 and is well above its 200-day SMA at $66.18 as this bubble continues to inflate. The weekly chart is in bubble territory with overbought MOJO and the five-week MMA at $74.62 and the 200-week SMA at $55.54. I do not show a risky level at this time.

At the time of publication, Suttmeier had no positions in stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at RSuttmeier@Gmail.com.
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SYM TRADE IT LAST %CHG
AMZN $518.37 3.51%
COST $140.21 1.48%
DG $74.27 -3.18%
LOW $69.06 0.45%
WMT $66.08 1.93%

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Chart of I:DJI
DOW 16,654.77 +369.26 2.27%
S&P 500 1,987.66 +47.15 2.43%
NASDAQ 4,812.7080 +115.1720 2.45%

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