NEW YORK (TheStreet) - I have been tracking nine discount retailers and on Wednesday Costco (COST - Get Report) reported an EPS miss of 6 cents a share earning 96 cents in the premarket. Share holders cried '96 tears' as the stock tumbled below its 50-day simple moving average at $119.95 after being above this moving average since Oct. 10. This is another warning that the Main Street economy is not growing up to potential.
The only discounter to be up from a month ago is Dollar General (DG - Get Report) with a gain of 5.7% since Nov. 11 after gapping above its 50-day SMA at $58.33 on Dec. 5. The biggest losers since Nov. 11 are Ross Stores (ROST) and Big Lots (BIG) which are down 10.3% and 15.9% respectively.
Six of the nine discounters had gains of 24.2% to 56% over the last 12 months on Nov. 11, and today one month later only five have lesser gains of 20.6% to 47.2% over the last 12 months.
Retail sales for November will be reported this morning and are expected to show a rise by 1.1%, which could give these buy rated stocks a reprieve from further price declines over the near term.
Overall stocks are not cheap fundamentally as 81.9% are overvalued according to www.ValuEngine,com with 48.4% overvalued by 20% or more. The discounters are in the retail-wholesale sector which is 23.4% overvalued. The nine discount retailers in today's report are all overvalued but only one by more than 20%.
Must Read: 4 Big-Volume Stocks Moving Higher
In Wednesday's down market four of the five of the major averages ended the day with declining 12x3x3 daily slow stochastic readings with closes below their 21-day simple moving averages at 15,960 on Dow Industrials, 1794.78 on the S&P 500, 7175 Dow transports and 1119.86 on the Russell 2000. The Nasdaq closed right on its 21-day at 4003, but with its stochastic reading moving below 80.00.
The weekly charts for the five major averages remain overbought but the Russell 2000 is just below its five-week modified moving average at 1110.25. The others are above their five-week MMAs at 15,800 Dow Industrials, 1774.1 S&P 500, 3957 Nasdaq and 7049 Dow transports.