In the retail sector, J.C. Penney (NYSE:JCP) has been stealing the show lately — and not in a good way. But while it remains on sell-watch in my book, there are plenty of other names in retail I wouldn’t touch either.
My scans, which are based on technical analysis, review the entire universe of stocks and yield the best candidates for option trading or short-term stock trading. Support and resistance, volatility levels, moving averages and technical patterns are all taken into consideration.
The names revealed in my research are both volatile and liquid — two important characteristics of profitable options or short-term trading. The results are overwhelmingly pessimistic for the consumer space.
Best Buy (NYSE:BBY), to start, is a very clear reconfirmed sell, with failing grades in near-term, intermediate-term and long-term relative strength.
I also wouldn’t count on the holiday runaround to pump up Nike (NYSE:NKE); my system has it on sell-watch.
Nordstrom (NYSE:JWN) gets an average review from my scans. While it’s not destined for the bargain basement, its “quiet” rating means your money is better off elsewhere.
Costco (NASDAQ:COST) may offer bulk items, but I don’t expect to see the stock bulk up in time for the holidays. It has a guarded status in my system, and looks to underperform relative to most stocks.
Amazon (NASDAQ:AMZN), a current problem stock, is an interesting case. It has dismal prospects (an F rating) in the near term and intermediate term, but has an A for long-term outlook. Look for a post-holiday bump but steer clear for now.
It may be near-blasphemous to some, but my scans are placing Apple (NASDAQ:AAPL) among the weakest stocks. Avoid AAPL in the near and intermediate term. I anticipate the stock could rally into 2013 based on my program’s results, though.
Wal-Mart (NYSE:WMT), on sell-watch, has a weak outlook ahead of the holidays but, again, may pick up early next year.
Avoid the mistake of thinking these stocks are a good buys right now. If you’re a short-side trader, though, near-term puts may stuff your stocking this year. With November options expiration coming up quickly, I’d stick with at least December expirations, and remember to always look for undervalued, slightly out of the money options.
Ken Trester is editor of the popular Maximum Options program. Trester has been trading options since the first exchanges opened with a winning streak that goes back to 1984.