NEW YORK (TheStreet) -- The consumer discretionary sector includes companies that offer goods and services like TV services, dining out, online purchases and home-improvement products that people buy only if they can afford them.This morning we learned that retail sales in July were stronger than expected with a gain of 0.8%. Excluding autos, retail sales rose 0.8%, and, excluding autos and gasoline, they rose 0.9%, also better than expected. This will likely give consumer discretionary stocks a boost in today's trading. Despite weak consumer confidence since the beginning of the "Great Credit Crunch" in late 2007, several stocks in this sector have set all-time highs or multi-year highs since May. As such, Investors should consider booking profits in some of these stocks. My benchmark for the sector is the Consumer Discretionary Sector SPDR Fund ( XLY), which contains 81 stocks. I will be focusing on the top 17 stocks in the fund by index weighting, each of which is 2% or higher. The consumer discretionary sector is undervalued by 1.3%, according to ValuEngine, which is as neutral as you can get based on fundamentals. XLY traded to an all-time high of $46.27 on May 1 after trading as low as $15.85 in March 2009, a gain of 191.9%, which is reason enough to consider booking profits. The daily chart shows that XLY ($44.64) is positive with rising momentum (12x3x3 daily slow stochastic) reading with XLY above its 21-day, 50-day and 200-day simple moving averages at $43.92, $43.54 and $42.28, respectively. My semiannual and annual value levels lag at $39.91 and $36.46 with a weekly pivot at $44.60 and monthly and quarterly risky levels at $47.52 and $50.12.
VE Rating -- A 1-Engine rating is a strong sell, a 2-Engine rating is a sell, a 3-Engine rating is a hold, a 4-Engine rating is a buy and a 5-Engine rating is a strong buy. Last 12-Month Return (%) -- Stocks with a red number declined by that percentage over the last 12 months. Stocks with a black number increased by that percentage. Forecast 1-Year Return -- Stocks with a red number are projected to decline by that percentage over the next 12 months. Stocks with a black number in the table are projected to move higher by that percentage over the next 12 months.
Home Depot ($52.82) traded to a multi-year high of $54.28 on July 27. My quarterly value level is $48.35 with a weekly pivot at $53.03 and a quarterly risky level at $54.42. Home Depot reported quarterly results before the market opened this morning that beat earnings-per-share estimates and raised its guidance for the full year above analyst expectations. Shares could find the strength to reach my quarterly risky level at $54.42, where investors should consider booking profits. Lowe's ( LOW) ($26.55) traded to a multi-year high of $32.29 on April 16. My annual value level is $25.06 with a weekly pivot at $25.77 and a quarterly risky level at $30.71. Nike ($95.85) traded to an all time high at $114.81 on May 2. My weekly value level is $86.30 with a semiannual pivot at $92.33 and a monthly risky level at $106.32. Nike reported weaker-than-expected earnings on June 29, citing higher expenses and a restructuring charge, and its shares fell to a low of $85.10 that day. Amazon.com ($232.44) traded to an all-time high of $246.71 on Oct. 14. My monthly value level is $227.60 with a semiannual risky level at $236.23. Priceline ( PCLN) ($562.00) traded to a multi-year high of $774.96 on April 10. My semiannual value level is $493.88 with a semiannual risky level at $615.29. On Aug. 7, Priceline gave a disappointing forecast for its third quarter that it blamed on the weak economy in Europe, and the stock traded as low as $553.43 on Aug. 9. As of publication, the author had no positions in the stocks mentioned today, and no other conflicts. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.