Good Fishing: Retail Apparel

Retail. Is. Alive.

Those who read me, know how bullish I have been the past few months in the Retail space – not just on oversold retail Apparel, Big Box and Automotive plays but extremely oversold apparel accessory plays: LB, ANF, URBN, GES, GPS, AEO. Most recently I even initiated swing longs in M and JWN, actual retail store plays, which I suspect will become trend longs.

This is on top of swing trading WMT, COST, TGT actively long, all the while not once trading AMZN.

In fact, I have had my best string of earnings plays–10 baggers as the cliche goes–in XRT plays: from the EXPE overnight short for EPS to trend long LB for two months now. I have been crazy about oversold auto retailers too: another 800% was made on AAP for an EPS play plus swing longs in ORLY and AZO. From specialty retailer OSTK swing long for $20 to shorting W for $20. And I’m not even talking about Chinese retail chases BABA, JD, WUBA which we have traded actively in the room as well.

My point: I have never traded retail as much as I have the past few months and I don’t think this theme is done. I think the trend reversal in out-of-favor, ‘Amazoned’-retail plays has just started to get attention and why not? With the FAANMG momentum plays way oversubscribed, value managers have to invest somewhere. There is value in select retail plays.

What drove my interest? The combination of technical oversold chart patterns combined with ridiculously cheap calls (relatively speaking to themselves historically and to puts post long downtrend) and just plain old book value/fundamental assessment. Just the other day, my sentiment ‘proof’ appeared in a tweet that also displayed actual demand too. Clearly, we were ahead of the trend. Now that it’s popular, will it really gain institutional buying?

Apparel & accessories online sales consistently growing faster than overall online retail. pic.twitter.com/ROIKCgY2ln

— Fully Synergized (@FullySynergized) November 15, 2017