By Tom Aspray, MoneyShow.com

The major averages closed last week just above the key 61.8% Fibonacci support before rocketing to the upside on Monday, spurred on by much-better-than-exp​ected Black Friday shopping.

Over the past several months, many economists had painted a bleak outlook for consumer spending. For example, in late September, the chief U.S. economist at Mizuho Securities, Steven Ricchiuto, said, "What you’re basically getting is a scene where consumers are losing momentum, they’re losing momentum on income, and as a result of that, they’re slowing down on spending."

Even the National Retail Federation was forecasting just an average holiday shopping season in early October. This was in contrast to the technical action of the retail stocks, which were already starting to outperform the S&P 500. In an Oct. 5 article (see “3 Best Buys in Retail Apparel”), I discussed how the Dow Jones Retail Apparel Index was much stronger than the S&P 500.

The current bullish outlook for the retail sector makes three additional retail stocks attractive buys at current levels.

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Chart Analysis: The S&P Specialty Retail Index hit a high of 383.54 on Nov. 14, which was very close to the all-time highs at 383.31.

• The recent pullback retested the breakout level (line a) last week. The correction in this group was much less severe than what was seen in the major averages
• There is stronger support in the 345 area with the daily uptrend, line b, near 337
• The relative performance, or RS analysis, broke out to the upside in late August when it surpassed resistance at line c. The RS shows a strong uptrend, line d
• The selling on the recent correction was fairly heavy, as the daily on-balance volume (OBV) dropped below its weighted moving average (WMA) but is holding support at line f
• The OBV needs to move above resistance at line e to signal significantly higher prices

United Online (UNTD) is a $455 million specialty retailer that is not widely known. It is the parent company of several familiar brands, however, including FTD, Classmates, and NetZero. The shares currently yield 8.2%.

• The daily chart shows that UNTD appeared to complete a double-bottom formation when it overcame resistance at line h
• UNTD failed to close above the daily downtrend, line g, in October, and fell sharply towards the prior lows
• It made a low of $4.80 in August, $4.81 in October, and hit low of $4.86 on Friday (Nov. 25). This creates a strong level of support
• The stock gapped higher on Monday with first resistance at $5.40 and then at $5.80
• There is key resistance in the $6.00-$6.20 area
• Volume was lower each time UNTD dropped below $5, which is characteristic of a sold-out market
• The OBV did break its downtrend (line j) very soon after the October lows and confirmed the recent highs

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