The Retail ETF Continues To Surprise Investors Despite A Jobless Recovery

“February sales at U.S. retailers were quite surprising, in a good way. Despite several severe snowstorms, sales have risen across the board, with companies ranging from Target (TGT) to Dillard’s (DDS) topping analysts’ expectations. The results bode well for the retail sector, which has been plagued by a jobless recovery in the U.S. economy and a surprise drop in consumer confidence in February,” Joseph Hargett Reports From Forbes.

Hargett goes on to say, “Technically speaking, the economic uncertainty and perceived pressure on U.S. consumer have not halted the sector’s strong price action. Specifically, the Retail HOLDRS Trust (amex: RTH) is up more than 3% since the start of 2010, versus the S&P 500 Index’s (SPX) advance of about 0.33%. What’s more, the trust has rallied more than 50% during the past 52 weeks, garnering support from its 10-week and 20-week moving averages since the March 2009 bottom.”

“Finally, RTH was also shielded from the recent bout of weakness in the broader market, as the trust held firm near support from its 160-week trendline. The ETF has since rebounded sharply from this moving average, and has bested former resistance in the 95 region as a result. Despite this strong price action amid adverse economic conditions, investors remain quite bearish on RTH. For instance, the trust’s Schaeffer’s put/call open interest ratio (SOIR) of 2.41 indicates that puts more than double calls among options with less than three months until expiration. This ratio also ranks above 89% of all those taken during the past year,” Hargett Reports.

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Here are some details on the Retail HOLDRs ETF (RTH):

The investment (RTH) seeks to diversify your investments in the retailing industry through a single, exchange-listed instrument representing your undivided beneficial ownership of the underlying securities. The trust holds securities issued by specified companies that, when initially selected, were in the retailing industry. Except when a reconstitution event, distribution of securities by an underlying issuer or other event occurs, the group of companies will not change. There are currently 20 companies included in the Retail HOLDRS.

TOP 10 HOLDINGS ( 83.00% OF TOTAL ASSETS)  
 
Company Symbol % Assets
Amazon.com, Inc. (AMZN) 10.03
Best Buy Co., Inc. Common Stock (BBY) 3.78
Costco Wholesale Corporation (COST) 5.04
CVS Caremark Corporation Common (CVS) 4.8
Home Depot, Inc. (The) Common S (HD) 12.32
Lowe’s Companies, Inc. Common S (LOW) 6.97
Target Corporation Common Stock (TGT) 8.24
TJX Companies, Inc. (The) Commo (TJX) 3.9
Wal-Mart Stores, Inc. Common St (WMT) 20.49
Walgreen Company Common Stock (WAG) 7.43

Chart for Retail HOLDRs (RTH)

 

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