Wednesday, January 29, 2014

JCP JC Penney Daily Chart Oversold Falling Wedge Positive Divergence

Every few months one of these come along. Remember the Netflix bottom when everyone claimed it was going bankrupt? How about Best Buy that was proclaimed dead last year and it was one of the best performers? There are a few other examples. With JCP, it has been nothing but beatings, and the beatings will continue until moral improves. Moral should improve moving forward. The daily and weekly charts are set up or setting up with positive divergence. The chart above shows how price dropped down to prior lows but look at how much less the indicators have moved down. The negativity is getting rung out of the stock.

Considering the shorts in the stock, any launch move off the positive divergence and falling wedge may provide strong upside gusto with a robust short-covering rally. Price may stumble sideways for a few more days or weeks but the bottom appears to be in or very very near for JC Penney. Despite all the problems and Ron Johnson trying to destroy the once-loved retailer with all his fanciful ideas, the stores appear to be holding up well. Clerks appear friendly and optimistic rather than waiting around for the demise of the company.

Note the gap at 7.7-8.2 that creates the island that price now sits on. In the weeks ahead, price may jump from 7.7 back up through the gap to 8.2 and higher to create an island reversal pattern, but that may be a little ways away. First thing is first so watch to see if the falling wedge and positive divergence creates the launch in the very short term. JCP should move sideways to sideways up for the remainder of the year. Perhaps JCP will be a positive story this year once the autumn rolls around again. Keystone just bot JCP today opening a new long position. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

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