By Doug Busch

While shares of luxury giants like LVMH Moët Hennessy Louis Vuitton languish, discount retailers' stocks have quietly taken the lead.

Technical analysis suggests that standouts like Five Below, Ollie's Bargain Outlet, and Dollar Tree can keep delivering gains.

Take Five Below stock, which has surged 32% this year, compared with LVMH's 15% drop so far in 2025.

The $125 level has proven pivotal for Five Below. The stock rejected price advances at that level in both June and December 2024 as seen on the chart below, triggering steep drawdowns to the upper $60s in August 2024, and last April hit a low of $52.48.

But that former $125 ceiling now looks like solid support, as the stock has rebounded aggressively from there. It recently cleared a bull flag breakout at $135, and now trades at $137.33 Thursday. With momentum on its side, a move toward $200 in the first half of 2026 looks well within reach for long-term bulls.

Ollie's stock is another star on the bargain scene. Its stock has risen 20% so far in 2025, steadily climbing since the 2024 first quarter by breaking above a series of cup bases. When it has fallen, the lows have consistently been higher than before.

The $100 level -- once a stubborn ceiling between June and December last year -- has flipped to support, illustrating classic round-number psychology. On Thursday, Ollie's changed hands at $131.22.

With this base-building behind it, the stock looks poised to target $145 by year-end 2025.

Dollar Tree has also been on a tear since shedding its troubled Dollar General acquisition in March. The stock has rallied in 14 of the last 15 weeks, tacking on another 4.7% this week as of Thursday afternoon.

A durable bottom took shape after bears repeatedly failed to push the stock below $60 -- even after sharp drawdowns of 34% last summer in late August and early September during the weeks ending Aug. 30 and Sept. 6 and 7% weekly hits both last November and April.

That resilience has flipped the script, and momentum is now clearly in the bulls' favor. With trend strength intact, a run toward the $150 zone, last seen in March 2024, looks increasingly likely by year-end.

Dollar Tree is trading at $115.27 on Thursday.

But Wall Street darling Costco Wholesale has stumbled since peaking in early June. At $936.02 on Thursday, the stock now sits 13% off those highs and forming a bearish technical setup.

A bear flag emerged shortly after filling the upside gap from March 6, with recent consolidation near $970. A break below that level opens the door to $870, potentially forming a triple bottom with the March and April lows. The digestion between mid-June and July created the pivot following the first two weeks of June's downtrend.

This marks the third dip below the 200-day moving average, perhaps too many times in quick succession -- a key trend gauge that many technicians warn "nothing good happens" beneath.

In a market chasing flash, the smart money's bagging bargains.

Write to Doug Busch at douglas.busch@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

July 24, 2025 14:45 ET (18:45 GMT)

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