High-end retail stocks show signs of bullishness

High-income retail stocks have seen strong gains in recent months, and recent commercial activity may be signaling higher growth on the horizon, CNBC’s Jim Cramer said on Tuesday.

“Non-essential high-end retailers have already run, but the graphics, interpreted by Bob Lang, suggest that Capri Holdings, Tapestry, LVMH and Nordstrom could have more advantages here thanks, yes, to stimulus checks,” The host of “Mad Money “said.

Lang, the founder of ExplosiveOptions.net and a contributor to TheStreet.com, is a trusted technician that Cramer trusts to get a read on the state of the market.

Cramer noted that last year was the longest retail bankruptcy period in history, as coronavirus blockages and restrictions undermined the brick-and-mortar retail landscape.

While the United States is carrying out its Covid-19 vaccination campaign and is approaching a full economic reopening, companies that have survived the damage may be in a position to benefit from another round of relief spending that includes a third distribution of direct payments for the most Americans.

“This entire group had been running out of gas for a few weeks, so Congress agreed to inject $ 2 trillion in [the economy] and now they’re looking at another taller leg, “said Cramer.

• Parent company of Versace, Jimmy Choo and Michael Kors
• The stock rose 38.4% in the last three months, surpassing 7.65% executed in the S&P 500
• Chaikin Money Flow, a measure of buying and selling pressure, is high
• The relative strength index, a momentum indicator, suggests that the stock is in overbought territory

“Lang thinks this is the kind of stock that gets overbought, but instead of being scared, he says he’s still overbought,” said Cramer, “which means he sees that he could revisit the old highs.”

• Coach’s father, Kate Spade and Stuart Weitzman
• The stock has risen 51% in the past three months and within dollars of its 52-week high
• The divergence of convergence of the moving average (MACD), an indicator of trend momentum, recently crossed
• Chaikin money flow is strong

“When the stock returned to its 50-day moving average in January, this was your chance [to buy it] … Lang thinks Tapestry is a quiet leader with more room to run, “said Cramer.” He’s more optimistic about Tapestry than I am.

• Father of Louis Vuitton, Hennessy and Christian Dior
• Stocks are up 8.25% in the last three months and within reach of their recent high
• He spent months trading sideways, creating a coiled spring situation that tends to lead to an upward trend
• MACD made a bullish cross, institutional investors are buying

“Lang is betting that the big guys are not finished” buying the shares, said Cramer.

• The stock has risen 45% in the last three months
• The 50-day simple moving average crossed the 200-day moving average in December, an upward sign
• The bullish cross is known as the “golden cross”

“Lang points out that the MACD is giving a buy signal now, and it does not detract from the fact that the last quarter has been spectacularly better than expected,” said Cramer. “Lang is betting that he will be able to race at his peak in 2018, about 50% above here.”