Beware The Falling Retail ETF (XRT)
April 27, 2010 Uncategorized
Despite recently touching a new 52-week high, stoked by what appears to be a freshly confidend consumer, the SPDR S&P Retail ETF (NYSE: XRT) could be poised for a decline.
At least that’s the feeling of options traders as put trading in XRT reach a nine-month high last week. The ETF now has a put/call ratio of about 4 to 1, according to Bloomberg News.
After rising steadily for several weeks, put volume in XRT jumped to 99,441 on April 22 and 191,315 on April 23, triple the four-week average, Bloomberg reported. Many traders are forecasting a drop of 18% or more for XRT by May 21, options expiration day for that month.
Many of XRT’s 62 constituents report April same-store sales on May 6 and those numbers could prove to be a drag on the ETF. XRT’s top holdings include Wal-Mart (NYSE: WMT), Target (NYSE: TGT) and Amazon (NYSE: AMZN).