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Weakness in Wal-Mart, Home Depot, and Other Retail Stocks Flying Under the Radar

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A few notable names have seen considerable pullbacks.

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The price action in the retail sector has been tricky lately. Many retail stocks have stalled or pulled back while some have fallen on their face. And much of this has flown under the radar. Some of this could be due to the late summer lull and market pullback, or perhaps the market is attempting to price in a lukewarm consumer in the face of another debt ceiling and budget debacle (and now potential conflict in the Middle East).

Either way, some big name retail stocks are underperforming. A few notable names that have seen considerable pullbacks include Home Depot (NYSE:HD), Target (NYSE:TGT), Wal-Mart (NYSE:WMT), and Amazon (NASDAQ:AMZN). Three of the four stocks have seen their near-term trend lines broken, with Amazon being the exception (although that doesn't provide much comfort to Amazon investors after a quick 10% haircut and indifferent chart setup).

Before we look at the aforementioned retail stocks, let's look at the chart and setup for the Consumer Discretionary Select Sector ETF (NYSEARCA:XLY). In the chart below, it's easy to see that the 50-day moving average was taken out and price is resting on one-year uptrend support. A sustained break below the trend line is unlikely to find support until the 200-day moving average (9% lower).

Consumer Discretionary: A Look at the Retail Sector



Now let's take a quick look at some key retail stocks that have been struggling.

Target Stock Chart



Home Depot Stock Chart



Wal-Mart Stock Chart



Amazon Stock Chart



Some notable recent outperformers include TJX Companies (NYSE:TJX) and Best Buy (NYSE:BBY).

TJX Companies Stock Chart



Best Buy Stock Chart



Thanks for reading. Trade safe; trade disciplined.

Editor's Note: Andrew Nyquist is an independent investor based in the Minneapolis area. This article originally appeared on his investing and economics site, See It Market.

Twitter: @andrewnyquist
No positions in stocks mentioned.

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