Stocks quoted in this article:
The S&P Retail Index (RLX - 1023.1
) continues its march higher today, marking its fifth straight record high. Since late October, the index has tacked on 25 percent. Nevertheless, pessimism is running high toward the group. Our research shows that the sector's put/call ratio is higher than 74 percent of all readings taken over the past 12 months.
The top performing RLX component today is Wal-Mart Stores (WMT - 69-5/8). As we noted in a recent Market Byte, WMT has been bumping its head against options-related resistance at the 70 strike for the past few days. Today, the shares marked a new all-time high at 70-1/4, but have since backpedaled. A sustained break above the 70 mark would be a healthy sign for the equity, as there is still plenty of pessimism toward the stock to fuel an additional rally. Short interest on WMT is heavy at 40.8 million shares, making it the fifth most shorted stock on the NYSE. With a short-interest ratio of 6.6 times the stock's average daily volume, a move to the upside could spark some significant short covering.