WSM is a national specialty retailer of fine qualitycooking and serving equipment, home furnishings and other home and garden accessories, marketed through 370 retail stores and 5 mail order catalogs. For the FY ended 1/28/01,net sales rose 25% to $1.83B. Net income fell 17% to $56.8M. Results reflect new store openings and an increase in comparable store sales, offset by the absence of a $4M gain on sale of assets.

May 1, 2001

Specialty home retailer Williams Sonoma continued to build on yesterday’s breakaway gap from $29.00. What’s more, today‘s move comes on volume nearly double the three-month average daily volume of 551,000. WSM has been the beneficiary of a resurging retail sector. Over the past week, the S&P Retail Index (RLX) has surged ahead 7.2 percent. At this point, WSM has made room to run higher. The stock has taken out resistance at $30 along with its upper Bollinger band at $30.56. With these resistance levels out of the way, it appears to be smooth sailing until $40. As for support, traders can look for $30 to provide the first level, followed by the 10-dma at $28.08. Traders considering a position in WSM should look for strong volume, 250,000 shares or more traded by noon EDT, on a move through today’s intra-day high of $31.40 or a bounce off support at $30.00 before placing their trades. We are placing our stop-loss just at $27.75, which is just below the 200-dma.

Picked on May 1st @ $31.10
Change since picked 0.00
Stop Loss @ $27.75

May 15, 2001

Monday was the end of the road for WSM, as we dropped the retailer ahead of it earnings announcements today. For the record, WSM posted earnings of $492,000, or $0.01 per share, for the first quarter, versus $4.8 million, or $0.08 per share, in the year-ago period. Unfortunately, we exit WSM with a $1.10 loss.

Picked on May 1st @ $31.10
Profit/Loss -1.10 (-4%)(Stopped Monday @ $30.00)
Best Profit +1.75 (+6%)

May 13, 2001

Continued strength in the S&P Retail Index (RLX.X) has us thinking that WSM has room to run. The stock performed a slow meltdown towards the end of last week, but also managed to fill the gap created on 4/30. This is technically significant since WSM bounced right off the lower portion of the gap and closed in the upper portion of its daily range on Friday. It also did this gap filling move on strong volume of 965,000 shares. WSM’s three-month average daily volume is only 570,000 shares. On Monday, we will look for a move above Thursday’s closing price of $31.15 as a good entry point for new plays on what we hope is optimism going in to the Fed meeting on Tuesday. Look for volume to exceed 200,000 by midmorning. We are keeping our stop at $27.75 to protect against any post Fed announcement volatility.

Picked on May 1st @ $31.10
Change since picked +1.41
Stop Loss @ $27.75