Tuesday, March 23, 2010

The Shoe Bull

As Jim Cramer alerted us to on Mad Money yesterday, there is a bull market in shoes right now. As usual, he zeroed in on "best in class" which he deems as Nike. I like bull markets but I don't like high profile, so I'll offer two shoe names that Cramer would frown on - Rocky Brands RCKY and Crocs CROX. Well I guess Crocs was high profile awhile back, but Rocky is quite obscure.

RCKY makes a lot of cowboy boots - very expensive ones. That's one thing that you'd think would be getting absolutely killed in this retail environment - completely needless spending by the average Joe. But just look at this chart: (click to enlarge charts)

These people know how to survive, and the stock price is showing the first twitches of emerging from the coma investors have put it in. It was dead as a hammer across the big market event of March '09 - about all the weak hands gone. I remember this one catching my eye back when it was around a comatose $4 over the course of the July market sell-off last year, but I never got around to buying it. The short term technicals currently look good:

There is a resistance level at $9.5 that will soon break if it follows the lead of CROX and NKE. CROX has been working on a similar formation:

I wrote up a buy case for CROX back on January 16 and it now looks ready to move above $8.

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