Getting Ahead Of Rally In Retail Sector ETF
by Mike Paulenoff
May 15, 2021 • 11:29 AM EDT
This past Friday, 30 minutes before the release of Retail Sales data for April, Mike Paulenoff posted his analysis of XRT, the SPDR S&P Retail Sector ETF.
After explaining in detail his analysis, which you can read here, Mike concluded: "All of the action from the Jan. 28th high at 99.24 through Tuesday's (May 12th) higher pullback low, represents a larger, bullish digestion period and pattern atop the dominant 15 month uptrend. In addition, based on my experience, the Coil type pattern that has been carved out has the requisite number of traverses across the contracting range to be considered complete or nearly complete, which if reasonably accurate, argues for the emergence of a new upleg in the XRT that propels the Retail ETF to new highs above 100, with an outlier upside target zone of 108 to 112."
XRT, trading at 89.56 at the time, proceeded to gap up to 90.60/65 at the open, despite a disappointing Retail Sales report. It clawed its way higher for all of Friday's session, closing at 93.42, a full 4.3% above its pre-market price at Mike's alert, and 3% above its up-gap opening price. This indicated strongly that the bullish pattern described by Mike in his early AM analysis to MPTader members was "calling the shots" for the XRT regardless of the apparent hiccup in April Retail Sales.
Where is XRT headed next? Based on Mike's analysis, XRT hasn't even broken out of its multi-month bullish digestion pattern yet.
Join Mike and our members in our MPTrader room as they analyze, discuss, and project the upcoming price action in XRT, as well as other names, ETFs, macro sector indices and futures, cryptos, commodities, and more.
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on
ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international
markets, plus key ETF component stocks in sectors like technology, mining, and banking.
Sign up for a Free 7-day Trial!
More Top Calls From Mike
In our Top Call article a month ago, we told you about how Mike Paulenoff called AAPL's upside continuation, with the expectation that the stock could extend a little higher before upside exhaustion.
AAPL, indeed, went on to stair-step higher to reach a high of 157.26 high last week, overshooting the upper boundary of Mike's 153-156 projected high-zone by just 0.8%. It then proceeded to initiate the expected bout of weakness that accelerated to the downside this past Friday.
On August 11, Mike Paulenoff alerted MPTrader members to a significant upside reversal signal in AMZN.
Mike wrote that "the 500 point decline is nearing downside exhaustion," noting a preferred downside target zone of 3180-3200.
Fast-forward to August 20, when AMZN pressed to a new multi-month corrective low at 3175.76.
On August 3, Mike Paulenoff alerted MPTrader members to the developing setup in AAPL that also would eventually impact the broader market:
Mike wrote: "AAPL continues to levitate within a high level digestion period and pattern off of its ATH at 150 hit on 7/15. All of the action since mid-July certainly resembles a Triangle pattern atop the May-July upleg from 121.68 to 150.
Probably the first price pattern both fundamental and technical investors learn to recognize is a Head and Shoulders Top. Rightly or wrongly, it is the Holy Grail of technical formations, striking fear into holders of the stock, index, ETF, or commodity that exhibits such a technical set up, while eliciting an opposite reaction from put owners and short sellers who anticipate huge gains captured by impending weakness.
Last Wednesday (July 14), with AAPL trading at 148.65 but off of its new all-time high at 150, Mike Paulenoff alerted MPTrader members to potentially consequential yellow caution flags emerging in his technical setup work.
Mike wrote:
This morning, JPM raised its Target Price to 175, one day after Citigroup raised its Target Price to 170. Do I hear 180... 185? Crickets at the moment. The Street is falling all over itself in its bullish view of AAPL.