As the industrial, technology, materials, energy and consumer staples sectors are all trading near highs, the consumer discretionary space is lagging behind. Overall the relative weakness compared to other sectors shows investors and traders are becoming more conservative with this bull market. They realize consumers can't or won't continue to buy discretionary goods at the same rate as they were prior, and this leads to a sinking price performance of these stocks. Taking a look at the major holdings in the consumer discretionary ETF, here are stocks holding up well, and not so well.

Consumer Discretionary Select Sector SPDR (ARCA:XLY) recently broke above a basing consolidation pattern, between $65 and $62.50, signaling an advance. That advance is likely to meet strong selling pressure in the vicinity of the December and March highs - between $66.85 and $67.85. After a very strong pullback in January the price was able to rally all the way to a new high, but only by a single dollar before retreating again; this shows most of the luster has disappeared from the sector. While a new high is a possibility, other sectors showing relative strength to this one provide better plays for those looking to participate on the long side.

Consumer Discretionary Select Sector SPDR (ARCA:XLY) recently broke above a basing consolidation pattern, between $65 and $62.50, signaling an advance.

Disney (NYSE:DIS) accounts for about 6.5% of the holding in XLY, and the stock just created an all time high at $84.39. Disney has been range bound since March, struggling to close above the $83.50. April has seen a number of daily closes above that level, but has so far failed to really break to the upside. A move back below $83 signals the sideways movement is likely to continue, with support between $77.50 and $76.20. A drop below that support region would lead to further downside pressure. The overall uptrend isn't in danger at this point though; it takes a drop below $70 to bring the long-term uptrend into question. Until that point, holding longs, or buying pull backs remains the play.

Disney (NYSE:DIS) accounts for about 6.5% (reference 1) of the holding in XLY, and the stock just created an all time high at $84.39. Disney has been range bound since March, struggling to close above the $83.50.

Amazon (Nasdaq:AMZN) accounts for 5.7% of the holding in XLY, and has lost more than 20% of its value since the January high at $408.06. This has put the stock in a downtrend, with rallies providing selling or shorting opportunities. When the price dropped below $300 in late April, the selling subsided, so there is strong potential for a short-term rally. The $330 region could provide short-term resistance, but $370 is the major area to watch. If the price rallies back into that region (March high) watch for strong selling (and traders jumping into short positions) as those investors who held through this recent decline look to cut their losses on the rally. There is no downside target, as this stock was trading below $40 in late 2008, rose more than 10-fold since then, but still has a trailing price/earnings ratio of 487, which leaves a lot of downside if company profitability doesn't pick up in future quarters.

Amazon (Nasdaq:AMZN) accounts for 5.7% of the holding in XLY, and has lost more than 20% of its value since the January high at $408.06.

Comcast (Nasdaq:CMCSA) accounts for 6.79% of the holdings within XLY, and has a price currently in "no man's land." The long-term trend remains up, but the price is also trading well below the $55.28 February high. This is reflective of the lagging performance in the sector, and contributes to it. For initiating new positions the stock is unappealing; Disney offers greater relative strength and is therefore a better buy, while Amazon is much weaker providing a better shorting opportunity. For those already in the stock, a rally above the April high at $52.48 should push the price into the the $54.25 to $55.28 resistance area. Given the late stage of the overall bull market, a significant rally above that area would be surprising. A drop back below the May low at $49.16 breaks the long-term trend line. This is a potential stop level on longs, but isn't shorting opportunity.

Comcast (Nasdaq:CMCSA) accounts for 6.79% of the holdings within XLY, and has a price currently in "no man's land."

The Bottom Line

The consumer discretionary sector as a whole is under pressure as investors realize consumers can't or won't continue to spend money at the same rate on discretionary goods. The sector is a big one though, so not every stock is showing signs of weakness. Disney is still trading at all time highs, showing strength within the sector. Amazon has entered a downtrend though, and Comcast is relatively weak and doesn't provide great opportunities for a move higher or lower. As a whole, the luster has left the sector and better buying opportunities are more abundant in currently stronger sectors, such as energy, consumer staples and materials.

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