$SFM vs XRT: SFM losses momentum. Underperforming XRT.

Within the SPDR Select Sector Retail ETF XRT there are very few stocks which consistently outperform the ETF itself let alone the $SPX. We have time and again focused on the momentum name Sprout Farmers within the ETF. SFM being a momentum stock tend to outperform the SPX and XRT on a long-term basis. But recent tariff related issues have created an air pocket for the stock. The stock is already below its 20, 50, 100 and 200-Day SMA. This has been typically countercyclical bullish indicator for the buyers of the stock. This is exactly what happened in 2021 and since then the stock already has provided a 700% return from the lows of 21 $.

But with recent poor price action the stock will have a death cross in a few weeks if this continues. The ratio of SFM /XRT is a bullish chart with higher highs and higher lows. Recently the ratio chart has fallen by 30%. So SFM has underperformed the XRT by 30%. The reasons can be multi-faceted from consumers pulling back to squeezed margins due to tariffs. But with RSI still above 40 we are still not in oversold territory. In my opinion the stock will have some more tough days, and we cannot rule out a minor pullback before we hit the historical low in RSI of 25 before we can hit the buy button.

Verdict: SFM chart is bearish. Lost momentum. Price can go below 100 $ and RSI to 25 before the washout is complete.