Thursday, November 25, 2010

5 Retail Stocks to Short

Black Stocks for Black Friday Top 10 Options Trades for 2011 Retail stocks have been some of the best performers during the past few months. Big-box retailers are reporting solid results, and investors seem sold on the idea that Black Friday and the holiday shopping season will bring even more cheer to the sector.     I hate to be a Grinch, but I think this optimism is misplaced. There is still a recession going on in the real world, unemployment is high, the Philly Fed just dropped its GDP forecast to 2.2% from 2.8%, and inventories are piling up again, according to the Empire State Manufacturing Survey. This economic reality has prompted a structural change in consumer spending habits that I call the New Frugal .     I’ve put together a list of five retail stocks that are due for a fall. In addition to faltering fundamentals, the charts are against them. The options trading picks I am recommending expire in January 2011 or beyond, but please don’t hang on to the bitter end. If you make a profit before expiration, do not hesitate to cash in.    
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