Shoes Dropping at Dillards
- Posted by Greg Harmon
- on February 4th, 2013
A quick look at the stock chart of Dillards, $DDS, shows a bull flag on a longer uptrend after a minor pullback through January. Consolidation at the previous high in a tight range. Many would view this as a bullish set up. I could make an argument for it as well. But life is not always that easy. Look closer at the Relative Strength Index (RSI). it is holding in bullish territory but making a lower
high at present. And the Moving Average Convergence Divergence (MACD) signal line is rolling back at a much lower level, although the histogram is near the November highs. These too support more upside and could be just a squiggle in a line and not a pullback. It is not until you look at some of its peers, Nordstrom, $JWN, and Macy’s, $M that things get a little antsy. Nordstrom shows
a rollover beginning about two weeks ago after a trend higher and Macy’s also had a great trend higher until a pullback from its bull flag Monday. They do not have to drag Dillards lower but adding in the Performance Chart for the last 200 days shows that Dilliards has vastly outperformed these
two giants. By about 40%. My immediate thoughts turn to mean reversion. More attune to the shoe dropping at Dillards than a breakout. What do you see?
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Gregory W. Harmon CMT, CFA, has traded since 1986 and held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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