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.