Retailer Sears has seen
a massive recovery – at least in its stock price, since the January
9th turn. From around $29 to $75 in just 9 weeks, that is
certainly one hell of a move.
Yet, is it really any
better now than two months ago? I'd suggest the answer is probably
not, unless you believe retail sales are going to rise across this
year, along with the company seriously improving its cost base
structure.
Bullish case
If SHLD can break into
the 83s, then yes, I'd declare that as a clear break, and maybe it'll
make a charge for $100. It has good up-trend support at $60, and the
10MA at $64
Bearish case
A break below $60, and
I'd be very concerned SHLD will make a challenge to test the low 40s.
Clearly, the ultimate
warning line right now is the January low of $29.
Balanced outlook
Chase above 83...or
short below 60.
If the main market does
have a minor pull-back, to around sp'1300/1260..but then starts to
surge..then SHLD would be a prime lunatic candidate to make an
attempt at $100 again – a level its not seen May 2010.
Next earnings data
Sears is not doing
well, its margins (much like AMZN) are too narrow. Analysts are
expecting further losses, and even a full year loss next year too!
So we have a $75 stock, and some say its not only going to hold this
level, but keep rising. All whilst it will likely put in losses for
another 4-6 quarters minimum? Err, no, that is not good.
Sure, the crazy market
might kick SHLD up to $100. For the moment, I ain't meddling in it,
but I'll sure watch it, especially if it breaks back into the 50s.
After all, its a long way from $50 to sub $10.
--
*Tis Sunday evening, the futures wheel opens up in 4.5hrs. I'm not going to expect anything much overnight, but bears will want to see some decline across the Monday-Tue period. I believe AAPL is due to release IPAD'3 this Wednesday, so that sort of media hysteria could help prop things up from late Wed for a day or two.