RETAIL SECTOR

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#1
In the wake of the TECH disaster and with the busy Christmas spending spree about to begin I have picked on a formerly depressed sector, according to both charts and improved sentiment, now on the move.

If you take the sector index high of 2600 in March '99 and again at 2300 in Aug'99 and follow the downtrend line - at Mid Nov 2000 we have just broken out from a charted 1600 to approx 1650. After a small pullback at end Oct we look to be moving north.
( please note: these are approximate readings and I am only a novice )

I then looked for companies which were fundamentally sound and found no fewer than 36 were trading on prospective price/earnings multiples of less than 10. In addition at least 30 of these are expected to see earnings growth of at least 15% over the next 12 months. If you take the cross-over where above average growth companies combine with a low rating together with good cashflow and low gearing there are several which should offer a sensible return in the medium term ( 3-6 months ). And a positive gain over 12 months.

We have seen an upturn recently in Arcadia and just missed it today Peacock (PEA) a classic bottom fisher +15% spiked at 1373% of avg vol. They only floated in Dec'99 and although the charts don,t appear to favour IMHO still have a way to go. My favourite hence my Share Challenge selection is Kleeneze (KLZ) RSI = 75 and with recent increased volumes and upward trend am looking for steady growth on this one.
Of the others Monsoon (MSN) is still heading north. Alexon (AXN) has on the back of good volumes recently broken through the trendline although there could be a minor pullback.
Of the rest to watch are:
MFI, QS Group, Homestyle, Forminster (owners of Kookai) and Austin Reed.

Blast, plumped for KLZ today and left out PEA still who knows could be more to come.

Please Please DYOR and I would welcome your involvement with reports and Technical Analysis on any of these stocks.

Good Luck


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