Don't Ignore This Chart!

DKS Sports A Test Of Long-Term Support

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Retailers were rocked on Friday with the five worst performing industry groups all in the retail space.  The S&P Retail index (XRT) dropped nearly 4% on Friday and more than 8% last week.  Many of the retail industry groups and stocks within those groups are at or challenging October 2014 lows on the heels of a poor monthly retail sales report that was released in pre-market action on Friday.  One of those companies, Dick's Sporting Goods (DKS), is testing an area of price support it's tested on several previous occasions over the past 3-4 years.  The 39.00-41.00 price support is very important for DKS in order to maintain its higher high and higher low uptrend off the 2009 lows.  One warning sign of a potential top in March 2015 was the unusually low volume that accompanied that final breakout (blue arrows).  Since that time, volume has accelerated as DKS has fallen roughly 30% off its high.  Check out the chart:


Happy trading!

Tom

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Tom Bowley
About the author: co-founded Invested Central in 2004 and served as the site's Chief Market Strategist for more than 10 years. Invested Central provides stock market education and guidance for those interested in making their own financial decisions. During his tenure at Invested Central, Tom co-hosted Market Open LIVE, a national radio broadcast that covered many of the largest markets across the U.S. In addition, he has spoken at various conferences throughout the United States and Canada and has taught thousands of traders across the globe how to trade equities more wisely with an emphasis on managing risk and intermarket relationships. Learn More
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