Can 11 Retail Stocks Rise From the Woodshed?

NEW YORK (TheStreet) -- On Wednesday afternoon the Federal Reserve releases its Beige Book for the Jan.29/Jan.30 FOMC meeting. I always view the Beige Book as a combination of gossip from the 12 Federal Reserve districts, and the theme has not changed since the December report. The U.S. economy continues to grow at a moderate pace. This indicates that the FOMC will likely reduce its bond purchases by another $10 billion a month in February.

A potential economic problem I have been observing is weakness in the consumer segment as several stocks in the retail-wholesale sector were taken to the woodshed on weaker than expected earnings in 2013. Today I am providing my 'buy and trade' parameters for 11 retailers that have declined by 15% or more from their 2013 highs and after doing so maintained or were upgraded to buy or strong buy according to www.ValuEngine.com.

The biggest loser is Aeropostale (ARO) down 54.5% followed by Lululemon (LULU) down 39.8% then GameStop (GME) down 36%. Using my 'buy and trade' investment strategies investors can try to 'catch a falling knife' using a good-until-cancelled GTC limit order to buy weakness to a value level.

Aeropostale ($7.78 vs. its 2013 high at $17.10 down 54.5%) has been below its 200-day simple moving average since Aug. 8 with that average down to $11.58 with a recent low at $7.62 on Jan. 13. The weekly chart profile is negative with its five-week modified moving average at $8.76 and its 200-week SMA at $17.84. This retailer has a buy rating is 30.9% overvalued with a loss of 41.3% over the last 12 months. My Semiannual and monthly value levels are $4.81 and $4.60 with semiannual pivots at $6.76 and $6.88.

Bed Bath & Beyond (BBBY) ($67.34 vs. its 2013 high at $80.82 down 16.7%) broke below its 200-day SMA at $73.58 on Jan. 9 trading down to $66.27 on Wednesday. The weekly chart profile is negative with its five-week MMA at $74.67 and its 200-week SMA at $58.88. This retailer has a strong buy rating is 1.8% undervalued and still has a gain of 20.7% over the last 12 months. My annual value level is $64.99 with weekly and quarterly risky levels at $74.56 and $79.77.

Big Lots (BIG) ($30.51 vs. its 2013 high at $39.22 down 22.2%) broke below its 200-day SMA at $35.24 trading down to $29.91 on Jan. 13. The weekly chart profile is negative with its five-week MMA at $32.54 and its 200-week SMA at $35.33. The retailer has a buy rating is 3.3% overvalued with a gain of 2.5% over the last 12 months. My weekly value level is $28.32 with a quarterly pivot at $31.20 and monthly and semiannual risky levels at $33.24 and $37.42.

Bob Evans Farms (BOBE) ($47.91 vs. its 2013 high at $60.21 down 20.4%) broke below its 200-day SMA at $50.34 on Jan. 8 trading as low as $47.55 on Jan. 13. The weekly chart profile is negative but oversold with its five-week MMA at $50.88 and its 200-week SMA at $37.50. The restaurant has a buy rating is 15.3% overvalued with a gain of 10.9% over the last 12 months. My annual and semiannual value levels are $47.70 and $45.26 with weekly and semiannual pivots at $48.12 and $49.85 and quarterly and monthly risky levels at $56.53 and $59.80.

Express (EXPR) ($18.76 vs. its 2013 high at $25.05 down 25.1%) broke below its 200-day SMA at $21.04 on Dec. 4 and traded as low as $18.02 on Dec. 12. The weekly chart profile is negative but oversold with its five-week MMA at $19.79. The retailer has a buy rating is 0.2% undervalued and gained 30.7% over the last 12 months. My weekly value level is $15.62 a quarterly pivot at $18.45 and monthly risky level at $25.14.

Five Below (FIVE) ($39.71 vs. its 2013 high at $55.28 down 28.2%) broke below its 200-day SMA at $41.82 and traded as low as $37.77 on Jan. 13. The weekly chart profile is negative with its five-week MMA at $43.61. The retailer has a buy rating and gained 24.8% over the last 12 months. My weekly value level is $35.56 with a quarterly pivot at $39.53 and monthly risky level at $48.93.

GameStop ($36.97 vs. its 2013 high at $57.74 down 36%) broke below its 200-day SMA at $44.96 on Jan. 14 trading as low as $36.00 on Jan. 14. The weekly chart profile is negative with its five-week MMA at $46.38 and its 200-week SMA at $27.14. The game retailer has a strong buy rating is 13.5% overvalued and gained 59.6% over the last 12 months. My semiannual value level is $33.36 with weekly and semiannual pivots at $38.81 and $39.50 and a quarterly risky level at $43.53.

Krispy Kreme (KKD) ($19.51 vs. its 2013 high at $26.63 down 26.7%) has been trading back and forth around its 200-day SMA at $19.33 since Dec. 11. The weekly chart profile is negative with its five-week MMA at $20.30 and its 200-week SMA at $9.68. The doughnut maker has a buy rating is 5.2% overvalued and gained 70.5% over the last 12 months. My semiannual value levels are $18.87 and $15.19 with a quarterly pivot at $20.31 and monthly risky level at $27.02.

Lululemon ($49.65 vs. its 2013 high at $82.50 down 39.8%) has been below its 200-day SMA at $69.64 since Dec. 10 and traded as low as $48.89 on Jan. 14. The weekly chart profile is negative but oversold with its five-week MMA at $60.10 and its 200-week SMA at $53.85. The yoga pants retailer has a strong buy rating is 28.2% undervalued and declined 28.5% over the last 12 months. My weekly and monthly risky levels are $58.42 and $60.25.

ULTA Salon (ULTA)ULTA ($85.89 vs. its 2013 high at $132.72 down 35.2%) has been below its 200-day SMA at $103.28 since Dec. 6 and traded as low as $82.42 on Jan. 15. The weekly chart profile is negative but oversold with its five-week MMA at $98.63 and its 200-week SMA at $71.36. The cosmetics retailer has a buy rating is 10.4% undervalued and declined 9.2% over the last 12 months. My weekly value level is $70.75 with a semiannual risky level at $120.79.

Zumiez (ZUMZ) ($22.67 vs. its 2013 high at $33.50 down 32.3%) has been below its 200-day SMA at $28.17 since Dec. 4 and traded as low as $22.05 on Jan. 13. The weekly chart profile is negative with its five-week MMA at $25.40 and its 200-week SMA at $26.09. The retailer has a buy rating is 18.6% undervalued and gained 8.3% over the last 12 months. My weekly value level is $21.72 with weekly and quarterly risky levels at $26.98 and $28.69.

At the time of publication the author held no positions in any of the stocks mentioned.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff

Richard Suttmeier is the chief market strategist at ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world.

Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary.

Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.

Click here for details on Suttmeier's "Buy and Trade" investment strategy.

Richard Suttmeier can be reached at RSuttmeier@Gmail.com

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