Food Retail on the Cusp of a Major, Long-Term Relative Break-Out
Below I plot a long-term chart depicting the ratio of the DJ Food Retail & Wholesale Index vs. SPX on a monthly basis. You’ll note that with a few weeks left in June, we appear to be staging a major break above long-term falling resistance dating to the early 2000s. In addition, via the sweeping blue arrow, note the major long-term base formation that such a break-out would seemingly complete.
What the latter chart effectively instructs one to do is to purchase WMT. WMT is the biggest player in this industry and is breaking out of a long-term pattern on its own and vs. the SPX on a quarterly basis. It’s chart set-up looks much better than all the names in the space (i.e., KR, COST, etc.).