The retailers are taking it on the chin again this morning as shares of Target Corporation (NYSE:TGT) and others are getting pulled lower by the tractor beam of poor earnings reports.
This morning’s three big stock charts analyze two better-known retailers, Tiffany & Co. (NYSE:TIF) and J C Penney Company Inc (NYSE:JCP). We’ll also look at the chart of AstraZeneca plc (ADR)(NYSE:AZN) as a Phase 3 trial success has shares attracting the bulls.
AstraZeneca plc (ADR) (AZN)
Starting with the good news, AstraZeneca shares are trading higher after the company reported Phase 3 data for Imfinzi met a primary endpoint. AZN stock had already been in a bullish transition and this fundamental news will help as a catalyst for the situation to improve.
AstraZeneca shares recently bounced off support at their 50-day moving average, which is also trending higher. The show of support from this trendline attracted buyers into the name.
More recently, in the last two days, AZN stock has moved above the $31-level, which has shown signs of chart resistance by expressing support and resistance at this price many times over the last six months.
Finally, AstraZeneca shares will open above their top Bollinger Band on today’s news, suggesting that we may see a volatility rally become the driver for higher prices.
The company isn’t set to announce their next round of earnings until late July, so the charts should have more bearing on the intermediate-term movement in AZN stock.
Tiffany & Co. (TIF)
The shiny bauble retailer gets a boost today from Goldman Sachs as the stock got an upgrade. TIF shares have been trading in a technically strong pattern, but are looking as though they are going to take a rest ahead of their May 24 earnings report.
Right now, the stock is doing a tightrope walk across its 50-day moving average, currently around $92 as the retail sector is trying to pull this “Best in Breed” stock down with the group.
There is some significant chart support at $90 as round numbers make for an easy target for the technical traders to hone-in on as a price at which to “buy the dips”.
If the retail stocks were to knock Tiffany from its $92 perch, the 100-day moving average is currently sitting at the $86.75-mark to lend a buying hand. This is the area that our models suggests that TIF stock would see buying pressure come in to lift shares higher.
J C Penney Company Inc (JCP)
One of the retailers responsible for the mayhem going on in the sector is JC Penney. This morning, JCP shares are more than 9% lower after the company’s earnings report failed to match expectations of the Street.
JC Penney stock had already been locked in a long-term bear market with prices trading well below their 20-month moving average. Now, we’re getting ready to see JCP trade into new low territory.
The sub-$5 price is the first time the stock has slumped this low since February of 2014. At that time, the company was in the midst of making a fundamental turnaround that resulted in a comeback for the ages. In this case? Not so much.
A few things will happen to JC Penney with the move below $5.
First, we’ll see institutional owners start to unload the stock if they already haven’t. Then we’ll see indices start to move JCP from larger indices to smaller ones, meaning that the stock will lose buyers from exchange-traded funds. Finally, if the pace keeps up, J C Penney will either get purchased or relegated to the low-dollar trading world. None of these are good for shareholders.
As of this writing, Chris Johnson, Johnson Research Group, did not hold a position in any of the aforementioned securities.
