Stay Alert During Correction

hen the market is in a correction, it's critical to keep a close eye on the market and continually update your watch list. Here are 2 stocks to get you started.

Lululemon Athletica (LULU) has been consolidating gains since hitting a two-year high in mid April. It's working on the eighth week of a new base. The Canadian retailer sells apparel for yoga, running and dancing. It has more than 100 stores across Australia, Canada, Hong Kong and the U.S. In late March, Lululemon trounced views with a 100% pop in fiscal Q4 earnings. Sales jumped 55% - the third straight month of acceleration. Its after-tax margin also climbed for the past three periods. Analysts see Lululemon's fiscal Q1 profit surging 133%.



Decker Outdoors (DECK) has been consolidating for seven weeks and may be shaping a handle to a double-bottom pattern.

The Goleta, Calif.-based maker of Ugg boots and Teva sandals has solid fundamentals, with EPS and sales growth both accelerating in the most recent quarter.

Deckers draws most of its revenue from selling Ugg footwear through retailers like Nordstrom, but it’s opening more of its own Ugg stores.

It plans to open nine Ugg retail locations this year, lifting its store total by nearly 50%. Deckers has said Ugg stores allow it to "capture the full retail margin on each direct to consumer transaction," as well as highlight the "lifestyle nature of the brand."



TJX Cos. (TJX) has been holding up well in the recent market weakness. The stock appears to be forming a base as it finds support at its 10-week moving average.

While most retailers reported lackluster May sales last week, the discount apparel chain posted better-than-expected same-store sales growth of 4%. Recession-hit consumers have flocked to discounters with unemployment remaining high and the economy uncertain.

TJX, which owns the T.J. Maxx and Marshalls stores, benefits from its substantial buying power. It’s the largest U.S. off-price apparel and home goods retailer, with more than 2,700 stores in North America and Europe.

In its latest quarter, the company's earnings rose 60%, beating analysts’ expectations. Sales rose 15% to $5 billion.