The well-known American retail company operating stores, Websites, and mobile applications under various brands, such as Macy’s, Bloomingdale’s, and Bluemercury, Macy’s Inc. (NYSE: M) shows signs of an upcoming price surge according to its latest charts.
Bullish Indications
#1 Falling Wedge Breakout: The daily chart of Macy’s shows that the stock was trading within a falling wedge pattern during the past few months. This pattern is marked in the daily chart in purple color. The stock has currently broken out from it. Once the stock moves breaks out from a bullish pattern like the Falling Wedge Pattern, it has the potential to move further up.
Daily Chart – Macy’s
#2 MACD above Signal Line: The daily chart shows that the MACD line (blue color) has crossed above the MACD signal line (orange color). This is a possible bullish setup.
[hana-code-insert name=’adsense-article’ /]#3 Bullish RSI: The RSI is currently near 50 and moving up after reaching oversold levels.
This indicates possible bullishness.
#4 RSI -Price Bullish Divergence: There is a bullish divergence between RSI and price in the daily chart.
While the price formed a lower low, the RSI formed to a higher low.
This is marked as pink dotted lines in the chart.
A bullish divergence is usually the sign of a possible upmove in the near-term.
#5 Higher Low: The weekly chart shows that the stock has formed a higher low after a downtrend. This indicates that the selling pressure is slowly easing and buyers are coming in. This is a possible bullish sign.
Weekly Chart – Macy’s
#6 Oversold RSI: The weekly chart shows that the RSI is currently moving upwards from oversold levels. This is a bullish sign.
#7 Bullish Stoch: The %K line (blue color) is above the %D (orange color) of the stochastic in the weekly chart. This is a possible bullish sign.
#8 Near Lower Bollinger Band: The stock had recently moved towards the lower Bollinger band and has now started moving upwards from there. At the same time, RSI is above 30 and moving up. This is usually a typical bullish setup based on RSI-Bollinger band.
Recommended Trade (based on the charts)
Buy Price: If you want to get in on this trade, you can purchase the shares of Macy’s at the current price of $21.56.
TP: Our target prices are $26 and $32 in the next 4 to 6 months.
SL: To limit risk, place a stop loss below $19.10. Note that this stop loss is on a closing basis.
Our target potential upside is almost 21% to 48% in the next 4-6 months.
For a risk of $2.46, our first target reward is $4.44 and the second target reward is $10.44. This is a 1:2 and 1:4 risk-reward trade.
Overall, this trade offers nearly 2x to 4x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down with high volume from the falling wedge pattern. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
Happy Trading!
Tara
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