After a weak March performance, stocks are roaring back.
The S&P rallied above the $4,000 level for the first time ever. The Dow blew past the $33,400 level, another all-time high. And the Nasdaq is trending near its own highs around $14,000.
Powered by strong momentum and April seasonality, all my economic data shows that the entire market will continue to move higher.
And this “options on steroids” trading strategy is thriving off of the bullish activity. It just gave one group of readers the chance to double their money in six trading days. Click here to learn how you can receive the next “super options” recommendation.
Now, there’s one exchange-traded fund (ETF) that stands to outperform the market during all this bullish activity.
You see, investors are getting over the initial shock of rising interest rates. They’re starting to warm up to the fact that the reopening economy is ready to bloom.
As buyers enter the market en masse, I’m noticing that a lot of cash is migrating between sectors.
This is happening because traders are focusing on sectors that are starting to outperform the market, and this opens opportunities for traders like us to cash in.
When money moves, opportunity abounds.
I’ve been tracking cash migration, technical strength, short interest, and other variables with my proprietary system – meaning you can’t get these findings anywhere else.
All my data points to one single ETF that you’ll want to jump on right away…
Retail: The Strongest Sector to Buy Right Now
It’s the SPDR Retail ETF (XRT).
Here’s the short and fast version of why you should be long this ETF…
- As of Tuesday’s, close, 85% of the companies that make up the XRT were trading above their respective 50-day moving averages. For comparison, only 67% of the Nasdaq 100 companies can make that same claim.
- Additionally, 64% of the XRT’s component companies have 50-day moving averages that are trending higher. This is one of the strongest breadth readings for all the ETFs the best in breed system tracks.
- Looking at relative strength, XRT shares are outpacing the S&P 500 by 20% over the last three months. Furthermore, only nine of the component companies are weaker than the S&P 500. These stats make the XRT shares one of the strongest in the current market.
- My proprietary “constituent weighted short interest” data indicates that the XRT shares show signs that a short squeeze rally is prepared to add to buying pressure for the ETF. This is happening as the shares prepare to challenge their 52-week highs around $95.
Looking at the technical data for XRT, I expect a break above $95 is going to cause a powerful combination of short covering and price chasing as traders will continue to move money from underperforming sectors and ETFs into this shining star.
With little technical resistance in place and increased consumer discretionary spending on the horizon, there’s still time to jump on the retail bandwagon before it becomes too crowded.
Buy-and-hold investors should be holding the stock with a price target of $115.
Those options traders out there might consider the XRT September 19, 2021 $100 calls for a purchase price of $3.50 or less. A move to $115 over the next three month’s trading could yield some triple-digit profits on this best in breed sector.
Next, I’ll drill down on the XRT with my best in breed system to identify the top three stocks to own within this hot sector. This approach puts us in the strongest stocks within the strongest sector, a formula for investing success in any market!
Keep an eye out,