The Retail Index (RLX.X) has been stuck in a channel between 825 and 860 for the past 9 days. With March retail sales due out this Thursday, the channel may break. The theory going around is that retail sales are going be hurt by the weak economy and the weather.
Retail Index Daily Chart
The 200-day moving average is perfectly flat, and right in the middle of the channel. The argument for prices breaking the lower channel boundary is the 2-month downtrend, and falling 50-day moving average. The MACD that is turning up is the argument for prices moving higher. With this index too close to call, perhaps some individual stocks can give us some clues.
Wal-Mart Stores Daily chart
The big boy of the group, Wal-Mart Stores (WMT), tried to break out of the congestion area it has been stuck in, but prices appear to be getting turned back today. They key area for this stock is a break above the previous high around 52.4. A break above this level should help to break the downtrend. If this stock moves, look for the rest of the sector to do the same.
American Eagle Outfitters Daily Chart
One stock that is expected to buck the trend is American Eagle Outfitters (AEOS). Reportedly, JP Morgan has raised its earnings estimate for American Eagle, based on increased store sales during the spring break season. The Stock is up 1.57 points today, but overhead resistance is sitting close by at 33. A break above 33 wouldn't carry as much sector weight as Wal-Mart, but it might be a pocket of strength to watch.