Looking for a retail stock to buy? Try Vipshop ($VIPS). (March 31, 2020)
VIPS
We’re at the end of the first quarter, which is a good thing because it has been “suckiest” first quarter that I have ever seen since I played basketball; I always had a bad first quarter and the other three weren’t much better.
Let’s look at Vipshop ( NYSE: VIPS ). Why? Well, because this is a retailer and it is actually up. If you look at the 50-day moving average, this thing is like sideways; it’s not the greatest pattern in the world. You can see how it broke out, fell back to basically find some support right around the 50-day moving average. It penetrated it for several days, fell below it and then came back above it.
Let’s look at this in more detail. The stock came up on about average volume, maybe a little bit heavier than average volume here. And then the following day, much greater volume here. Ultimately, it peaked right about $16.00; this thing ran about from about 12.70 up to $16.00, in a matter of 4-days, that’s 25 percent and in my neighborhood that’s pretty good. And then the stock pulls back but it does not hit, it doesn’t test this last low. This last low was fine it didn’t even come close. Instead, it fell right back to the 50-day moving average and it ran up from there.
Now, make no mistake, this is a really sloppy pattern, like it is really ugly, it’s boarding on “fugly” but that is kind of all we have in this market right now. And so you can either stand aside completely, and there is no shame in that, there is a lot of merit in that actually. Or you can look at a stock like Vipshop ( NYSE: VIPS ), you look at $14.00 as support, that’s a pretty wide range to be buying a stock at 15.00, 16.00, selling it at 13.90 on a percentage basis that isn’t good but the stock will work.
I would say if the stock breaks out above $16.00, that is evidence that there is some real buying coming in, particularly, if it happens on heavier than average volume. So watch for a move to the upside on Vipshop ( NYSE: VIPS ) and you are probably going to get a nice return on this. But in this kind of market I am not looking at the weekly chart saying golly gee this is great. It does look kind of good but I am just looking at the daily chart and we are just kind of chipping for par here. We are just looking for $1.00-$1.50 or something like that.
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