Sticking with our market, sector, stock approach, we are using the Retail Index (RLX.X) as a gauge for or Wal-Mart trade.
Retail Index Daily Chart
After breaking the downtrend, prices had a hard time getting above the 50% retracement bracket. Prices dipped back down and tested the trend line, and 50-period moving average before finally making it above the 50% level. RLX is now cleared to test the next resistance level at 916. A test of this level should correspond with Wal-Mart's test of $53.37.
K Mart Daily and P&F Chart
Back on April 2, I pointed out that K Mart (NYSE:KM) was stuck in a channel, and 21 days later it's trying to break out. K Mart has tried a jailbreak twice before, but lacked sufficient volume to sustain the move. Today's move looks a little more convincing, but I'm still not sold on the volume. I am encouraged by the last two lows being higher, but I'll need prices to close above the channel for two or three days before I'm convinced. The point and figure chart (pasted on the left side of the bar chart) paints a different picture of the same story. Prices have moved a whopping 2 boxes in the past two months. The April box has issued a buy signal, but prices haven't moved since then. K Mart has to hit a high of $10 to add another box.
Speaking of point and figure charts, we're going to review bullish price objectives in Premier Markets 4:30 update.