15MIN CHART
JCPenney has been undergoing very hefty volume lately after
former CEO Mike Ullman was announced to replace Ron Johnson. I am starting off
by looking at a 15min chart of JCP. The stock closed the trading session today
green at 14.86(5.46%). JCP tested R2 (14.83) of the Woodie’s Pivot several
times; the 38.20% retracement level plays a bigger role indeed, having lent
itself as great S/R multiple times in past months. The stock has had a very
nice ride with the RSI, showing off good turning points at oversold/bought
levels. Price has been converging lately with both oscillators, though if
entering a position, I would advice placing a very tight stop on quote order,
consequently of the oscillators breaking out, or predominantly, the stock crossing
below 14.82 after all.
DAILY CHART
ZOOM AT DAILY CHART
This second part I
expanded the time frame to a daily chart that I consider to be a prominent
perspective of JCP’s previous months price action. I want to briefly highlight
a few components that can serve as potential entry/exit price strategies. First
of all I placed four separate trend lines, which altogether have been creating
a price squeeze pattern at different levels; the next image is nothing but a
much closer look at the pattern. The squeeze has been lately contracting much
closer, possibly in the upcoming days, we may see a very aggressive breakout.
As I mentioned before, the RSI has worked very well with JCP; even better if
combined with 50SMA crossovers and Slow Stochastic confirmations. Conclusively,
I would not recommend positioning against the trend at the moment. The chances
of getting wiped out by prices pushing much lower are high, given the
pessimistic outlook JCP has been receiving regarding the company not being able
to meet its debt obligations in a near future.
Alexander Schachter
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