Dillard's, Inc. operates retail department stores primarily in the Southeastern, Southwestern, and Midwestern areas of the United States. The company's stores offer a selection of merchandise, including fashion apparel for women, men, and children; accessories; cosmetics; home furnishings; and other consumer goods.
Can’t say I ever heard of Dillard as I live in the Northeast. Either way, Dillard can’t hide…not from me, but from Amazon. The rise of ecommerce outlets has made it harder for traditional retailers to attract customers to their stores and there is no bigger culprit than Amazon.
The Amazon effect is the ongoing evolution and disruption of the retail market. Retailers closed over 102 million square feet of store space in 2017 and 2018 and in 2019, over 8,000 stores will close their doors.
However, Dillard got a victory today for retailers such as Macy’s, J.C Penny and Nordstrom.
Dillard's Inc. DDS, +0.17% stock soared 17% in Thursday trading after it reported a surprise profit, and lifted other department store stocks with it. J.C. Penney Co. Inc. JCP, +0.90% shares jumped 5%, Macy's Inc. M, +1.06% shares climbed nearly 3%, and Nordstrom Inc. JWN, +0.05% stock was up almost 2% on Thursday. Many department stores haven't reported their latest quarterly earnings, heading into a holiday season with both bullish forecasts for sales but concerns about the shortened shopping period. Dillard's stock has gained 32% for the year to date,
Dillard is really bucking the trend. I had no idea Dillard was up 32% this year. I’m actually licking my chops…could this be a shorting opportunity…wow…this was a shorting opportunity. The big picture shows a monthly supply zone at $104,
But my eyes are draw to the wicks near $85. In the last four years, price has only been able to close above $85 once on the monthly chart.
Taking things down to a daily chart, price pierced the upper Bollinger Bands. Bollinger Bands are a type of volatility indicator developed by John Bollinger. Bollinger Bands are lines plotted at a standard deviation level, typically two SD above and below a simple moving average of the price. In sideway markets, meaning markets that aren’t trending, price will typically bounce off of one band to the other.
In the case of Dillard, price pierced the upper band and has since pulled back which presented a great opportunity for a short.
Personally I think price is going to fill the gap, but it doesn’t matter any longer as the trade set-up came and went.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.