Fake Out or Breakout? Decoding Retail Stocks’ Next Steps Amid Market Challenges

For Turnaround Tuesday, let’s reexamine the ETF , which we have tracked all year. 

Since February 2024, XRT has been in a massive consolidation. 

While the ETF recently looked poised for a breakout and a weekly close over $80, the disappointing news is that it has yet to happen. 

We are super focused on this ETF as not only did XRT fail to close above the 10-month consolidation, but it also impacted the rest of the Family. 

The () failed to make new all-time highs. 

The reversed from its new all-time highs. 

These are 3 ‘inside sectors” of the market and the US economy. And a very good “tell” on just how effective the market feels new policies will be. 

Although looking at present, geopolitics and high interest rates are not helping confidence either. 

XRT is our “go-to” as even after Walmart (NYSE:) reported excellent earnings, XRT is made up of both and , which means it is a fair representation of consumer habits in the US. 

However, was that it? 

Will Granny test the low of the range, or make another valiant attempt to clear above the persistent price range?  

There are 2 charts featured. The daily and weekly timeframes. 

The Daily chart shows one close over the key $80 area without a second or even another day confirmation. 

At this point we can call that a fake out and not a true breakout. For now, XRT must hold the gap from the day after the election, which it did today. 

Then, XRT must rally back over 79 and close there. 

If XRT fails to hold the gap, there is a good chance the price drops back to the 50-DMA (blue). 

The weekly chart is even more important. Should XRT get a new high weekly close over 79.16, that would be better confirmation of a further rally likely.  

ETF Summary 

(Pivotal means short-term bullish above that level and bearish below) 

• S&P 500 (SPY) 575 support 600 resistance 
• Russell 2000 (IWM) 227 support 244 the area to clear 
• Dow (DIA) 430 support   
• Nasdaq (QQQ) 500 now pivotal 
• Regional banks (KRE) 65 pivotal 
• Semiconductors (SMH) 235 the 200-DMA to hold 250 resistance 
• Transportation (IYT) Looks good if it holds over 71 
• Biotechnology (IBB) 132 support 138 now resistance 
• Retail (XRT)  Support 77.30 resistance 79  
• iShares iBoxx Hi Yd Cor Bond ETF (HYG) 79.50 pivotal and back above