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Shopping Amazon and Mall Stores? Here's What to Trade

Since setting tradable lows between Dec. 22 and Jan. 20, mall anchors Dillard's (DDS - Get Report) , J.C. Penney (JCP - Get Report) , Nordstrom (JWN - Get Report) and Macy's (M - Get Report) actually outperformed Amazon.com (AMZN - Get Report) . Then things turned around in a bad way between March 8 and March 18.

Amazon did not set its tradable low until Feb. 9. It then began its momentum rally on March 21 just as the mall anchors were topping out.

Back on March 30, I showed how the technical charts indicated it was time to sell the mall anchors. Since their March highs these stocks are down between 17% and 31%. Meanwhile, Amazon set its 2016 high on May 2.

Here's the scorecard that shows the turnaround from the mall back to online shopping.

Dillard's, Nordstrom and Macy's are still in bear market territory versus all-time highs set between March 2015 and July 2015. J.C. Penney set its multiyear high on March 8 and its chart will show a 31.1% popped bubble to Friday's close.

Looking at the weekly charts, Amazon's chart shows the stock as positive but overbought. Meanwhile, the four mall anchors have negative weekly charts.

Macy's kicks off mall earnings on Wednesday and is expected to earn 36 cents a share. Dillard's and Nordstrom report on Thursday and are expected to earn $2.62 a share and 45 cents a share, respectively. J.C. Penney reports Friday with a projected loss of 39 cents a share.

Here's the daily chart for Amazon.

Courtesy of MetaStock Xenith

The horizontal lines show the Fibonacci retracements of the decline from its all-time high of $696.44 set on Dec. 29 and the Feb. 9 low of $474.

On the first wave up Amazon stalled at its 50% retracement of $585.21 on March 2. After dipping below its 38.2% retracement of $558.84 and its 200-day simple moving average of $555.20 to a low of $538.58 on March 21, momentum returned.

Once Amazon moved above its 50% retracement on March 29, the next key level was the 61.8% retracement of $611.59. A positive reaction to earnings caused a price gap higher on April 29 and the 2016 high of $685.50 on May 2.

Investors looking to buy Amazon should consider doing so on weakness to $638.93, which is a key level on technical charts until the end of this week.

Investors looking to reduce holdings should consider selling strength to $716.18, which is a key level on technical charts until the end of May.

Here's the daily chart for Dillard's.

Courtesy of MetaStock...


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