This Discount Retailer is Poised for a Rally
The early indications from holiday retail sales numbers are showing that retailers had a very merry Christmas, but the results did vary from one segment to another. According to the Mastercard SpendingPulse report, retail sales were up 5.1% from December 1 through 24 compared to the same period one year ago.
There were interesting pockets where sales increased and decreased. Home improvement sales were up 9% while electronics were down 0.7%. Another area that saw a big increase was apparel with a gain of 7.9%.
Enter Ross Stores (Nasdaq: ROST) -- a company I have been watching for quite some time. The stock pulled back in the last few months, but it found support just above its 104-week moving average.
The stock was tremendously oversold based on the weekly stochastic readings. The readings were the lowest they had been since July ’17 before turning higher in the last two weeks. When the stochastic readings made a bullish crossover in ’17, the stock rallied over 50% in the next six months.
The company has seen its earnings grow at a solid pace in recent years. The EPS growth rate has averaged 18% annually over the last three years and analysts expect earnings growth of 25% in the current year.
I don’t know that we will see a 50% jump in the stock over the next six months, but I certainly expect the stock to rally.
Contributor
Harry Richardson — Algorithmic Trader & Strategy Developer Harry is an algorithmic trader specializing in impulse and breakout trading strategies across cryptocurrency and equity markets. With more than 10 years of experience in developing automated trading systems, he focuses on building structured algorithms designed to capture momentum while maintaining strict risk control. His approach combines quantitative analysis, real-market execution, and continuous performance monitoring. Vitalii prioritizes risk management, drawdown control, and strategy stability over short-term optimization, ensuring algorithms are adaptable to changing market conditions. He has developed and tested hundreds of automated strategies, working extensively with live trading environments, forward testing, and portfolio-level algorithm management. His work centers on transforming trading ideas into fully operational, scalable automated systems.
ROST's RSI Indicator recovers from oversold territory
The RSI Oscillator for ROST moved out of oversold territory on August 21, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 27 similar instances when the indicator left oversold territory. In 21 of the 27 cases the stock moved higher. This puts the odds of a move higher at 78%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 36 of 57 cases where ROST's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 63%.
The Momentum Indicator moved above the 0 level on September 11, 2026. You may want to consider a long position or call options on ROST as a result. In 55 of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 65%.
Following a +2.43% 3-day Advance, the price is estimated to grow further. Considering data from situations where ROST advanced for three days, in 216 of 350 cases, the price rose further within the following month. The odds of a continued upward trend are 62%.
ROST may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Moving Average Convergence Divergence Histogram (MACD) for ROST turned negative on August 12, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 51 similar instances when the indicator turned negative. In 23 of the 51 cases the stock turned lower in the days that followed. This puts the odds of success at 45%.
ROST moved below its 50-day moving average on August 27, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for ROST crossed bearishly below the 50-day moving average on September 01, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 8 of 12 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 67%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ROST declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 53%.
The Aroon Indicator for ROST entered a downward trend on September 11, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is 19 (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 89, placing this stock better than average.
The Tickeron SMR rating for this company is 24 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 27 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 47 (best 1 - 100 worst), indicating steady price growth. ROST’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of 94 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: ROST's P/B Ratio (10.929) is very high in comparison to the industry average of (3.090). P/E Ratio (27.901) is within average values for comparable stocks, (20.016). ROST's Projected Growth (PEG Ratio) (2.474) is slightly higher than the industry average of (1.681). ROST has a moderately low Dividend Yield (0.007) as compared to the industry average of (0.035). ROST's P/S Ratio (3.028) is very high in comparison to the industry average of (0.679).
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General Information
an operator of discount clothing chains & sells closeout merchandise
Industry ApparelFootwearRetail
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