Not all of retail is created equal, Jim Cramer told viewers of Mad Money Monday night. Many of the mall-based retailers have been left for dead, but there are three outliers that have been lagging their peers, but are now playing catch up. They are L Brands (LB) , American Eagle Outfitters (AEO) and Gap (GPS) , and Cramer said all three can be bought.
I need to shop for a present for my wife so let's look at LB today.
In this daily bar chart of LB, below, we can see that prices declined sharply in February and March with the weakness in the broad market. The broad market quickly recovered from its March low but LB behaved much differently. LB retested the $10-$9 area in April and May before a rally got underway.
Prices have recovered and made new 2020 highs in August. LB is trading above the rising 50-day moving average line and above the rising 200-day moving average line.
The On-Balance-Volume (OBV) line bottomed in March/April and moved higher into September telling us that buyers of LB were more aggressive. More recently the OBV line has diverged from the new price high.
The Moving Average Convergence Divergence (MACD) oscillator peaked in August and is making a much lower high in October. This is a bearish divergence when compared to the price action.