Zak Mir on Retailers, SBM’s Xmas bonus and 2 pieces of coal!!

With only a week to go before Christmas, I can reveal that the Editor of Spreadbet Magazine (yours truly!) has not bought anyone anything – not even a card. Clearly, this state of affairs is not sustainable in the Mir household, just like the UK housing bubble in fact and so it must be rectified soon!

I would suspect it may be that as soon as the Spreadbet Magazine Christmas bonus (two pieces of coal, not one like last year!!!) hits the bank account that yours truly will succumb to peer group pressure and the spending shall begin in earnest. In a time honoured variation of this concept it seems appropriate to look at some key UK retailers to see if their charting configurations are revealing anything obvious regarding how Christmas 2013 may be going..?

First up is fashion retailer Next (NXT) where we are still riding high off the back of a multi-year rally and fundamentals which almost imply that for this FTSE 100 company it is Christmas every day. Looking at the recent set up it can be seen how the price action has been largely encapsulated by a rising trend channel from May. Also standing out are the June and October bear trap reversals from below the blue 50 day moving average – currently at 5,370p and now acting as the floor of the rising 2013 trend channel.

During April and August it is evident that the stock bounced almost exactly off the 50 day line. The view now is that going forward one would be loyal to the idea of a new leg to the upside for Next shares, especially while there is no end of day close back below the May uptrend line / 50 day line combo. As long as this is the case, and backed up by a hefty unfilled gap to the upside, we should be looking to a 5,900p target at the top of the year’s price channel to be hit, perhaps as soon as the end of January. Indeed, only cautious traders would wait on say a weekly close above the post October 5,600p zone peaks before taking the plunge on the upside.

While shares of Next have been relentless in terms of their journey higher for over 20 years now, it can be said that “chav” outfitter Sports Direct (SPD) has enjoyed a rally which has been no less impressive, certainly over the last 3 years. This is said despite the way that since early September the stock has not only gone into consolidation mode within a range of 650p – 770p, but it has also become that much more volatile. Nevertheless, it would appear that this rougher ride may be the prelude to a fresh leg to the upside, especially given the way that three attempts to hold below 650p have failed since October, and we have just been treated to a rebound off a falling June RSI support line off the RSI 35 level.

The implication now is that at least while there is no end of day close back below the April price channel floor at 695p we could be looking to a top of 2013 price channel target as high as 850p over the next 4-6 weeks – most likely once the Christmas period performance is known.

Finally, I am taking a look at the company which could be described as the Next for the online area: ASOS (ASC). Here it can be seen how the former bear target of a certain Simon Cawkwell (our proprietor’s dear friend – not!!) has continued to rally in recent months.

The vehicle for the ascent is a rising trend channel from the end of April. Allowing some wiggle room for the bull argument from current levels, it can be said that while there is no end of day close back below the 50 day moving average at 5,640p one would be looking for a top of 2013 price channel target as high as 6,500p plus over the next 1-2 months at most. The RSI in the mid 50s currently is in the favoured zone for a non volatile entry and initial share price journey.