Retail Stocks Approach Multi Year Highs with Recent Stock Market Recovery

During the first several months of the year financial stocks led United States stock markets higher.  Retail stocks were not far behind as some of the more popular names were up 40% and even 50% by the beginning of May 2012.  Some of these same names plummeted during the market correction but the Retail Market Vectors ETF recently pushed above its 50 day moving average and it sits just $0.50 below the yearly highs.

Low Cost Convenience Stores Remain Very Popular

With the Greek and Spanish debt crisis firmly on the minds of many Americans some analysts feel as if consumers are willing to spend less in fear of another financial fall out.  Instead of going to the more upscale stores like Nordstrom, Lululemon or Saks 5th Avenue individuals are scaling back and looking to save money.  Names like Family Dollar, Dollar Tree and Dollar General have seen stock prices accelerate to all time highs in the last week.  In fact, Dollar General finished Friday up 3.24% to close at the highest level in the history of the company ($52.19).

Photo by NNECAPA via Flickr

As hard working individuals look to save money with used cars for sale by owner under $5000 and sales and deals at local retailers it stands to reason that “dollar stores” and low price point retailers are benefitting the most.  WalMart recently jumped to multi year highs above $65 a share and some believe the breakout will send the stock to all time high levels.  In January of 2000 the stock closed at $68.50.  Any strong move higher with volume could rocket this retail giant to well over $75 a share.

Crude Oil Sinks to Yearly Lows Under $85 a Barrel

Since the beginning of May crude oil has moved straight down.  There have been no dead cat bounces and no levels of support have held.  On the first trading day of May 2012 crude oil was trading around $105 a barrel.  On June 15th, 2012 crude oil closed the trading day at $83.95 a barrel.  It looks as if the $82.50 range has held as support over the last week but we will have to wait and see what happens in the coming weeks.  The summer driving season is upon us which usually means higher gas prices but 2012 has been much different.  In some parts of Georgia and South Carolina the price of gas is under $3 a gallon.  In years past some took out secured credit cards from gas stations but this doesn’t look to be necessary in 2012.

Many technical analysts feel as if crude oil has dropped too far too fast and now is a great buying opportunity.  The 200 day moving average was pierced easily and the 50 day moving average has now had a bearish crossover.  All of the bad news means that contrarian buyers are happen to pick of the oil that is being sold by those who fear a further drop.