Trade of the Day: Tiffany & Co. Could Be a Stocking Stuffer

Tiffany & Co. looks ready to make a breakout from its consolidation area

By Serge Berger, InvestorPlace Chief Technical Analyst

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Shares of Tiffany & Co. (NYSE:TIF) closed marginally lower last week. However, through multiple time frames they continue to look ready for a break higher from their nine-month sideways consolidation phase.

TIF Stock: Tiffany & Co. (TIF) Could Be a Stocking Stuffer
Source: Shutterstock

Over the years, shares of Tiffany have often times surprised me, both in terms of their resilience in the face of weak economic conditions as well as their ability to rally on even just marginally positive news.

So you know, TIF stock also acts notably well to various technical patterns on its charts … even if a move in any given direction takes a little time to set up.

When Tiffany reported its latest batch of earnings on earnings Nov. 29, both its top and bottom lines beat expectations and the company reiterated its fiscal year forecasts. TIF stock then rallied in kind for two days before slipping again.

TIF Stock Charts


Click to Enlarge

Moving averages legend: red – 200 week, blue – 100 week, yellow – 50 week

To gain some perspective around all of this, let’s note where TIF stock currently sits in relation to its multi-year price action. After the stock topped out in 2014 it slipped 50% into the summer 2016 lows from where it again  began to climb. Through this lens, this 2015/2016 pullback was a healthy bigger picture consolidation phase even if it was 50% deep. After an initial rally in the second half of 2016 TIF stock ran out of steam and by the spring of 2017 slipped into a sideways consolidation phase (blue box on the chart) within it remains to this day … although maybe not much longer.

The post-earnings rally did close the stock above this consolidation phase on a weekly basis for the first time ever, which is to say that on the weekly charts a breakout has occurred. Even last week’s marginal weakness did not push the stock back into the consolidation phase, i.e. held the stock above the breakout point.


Click to Enlarge

Moving averages legend: red – 200 day, blue – 100 day, yellow – 50 day

On the daily chart note that since May, TIF stock has been developing a series of higher lows and with the rally on December 1st also scored a marginal higher high. Even though the stock gave up some of these initial post-earnings gains last week, in my eye the breakout on the daily chart above supersedes the yet-to-confirm breakout on the daily chart.

This is yet another example that perfectly highlights the importance of using a multi time-frame approach that I offer in this column every week day for ye faithful.

All in all, barring any major bearish reversal from here that sees the stock dip back into the mid $90s, the stock from here stands a good chance of moving higher and continuing that breakout which it has already started on the weekly chart. As a next upside target, the still unfilled down-gap from 2015 around $103.50 comes into play.

Check out Serge’s Daily Market Outlook for Dec. 11.

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