TJX Cos., Inc. (TJX) was reviewed at the end of February, and I wrote that "TJX is making a major upside breakout. Investors and traders who are long are in the driver's seat now. Look for gains to around $91 and I would raise sell stops to around $75."
TJX has not reached our $91 price target but I would raise sell stops to just below $80. Here's my reasoning.
In this daily bar chart of TJX, below, we can see that prices dipped in late March to fill the gap made in late February. Prices retested the rising 50-day moving average line but volume did not increase on the day of the test. A successful test of a trend line or a moving average line is a time to buy and when you do not see an expansion of trading it is a caution flag for me. Looking at the On-Balance-Volume (OBV) line we can see that it has turned sideways the past six weeks. Sometimes the OBV line leads prices but it is not showing any bullish leadership right now.
In the lower panel is the 12-day momentum average line, which is showing lower highs from March to April when prices are making roughly equal highs. This difference is a bearish divergence and could be foreshadowing weaker prices ahead.
In this weekly bar chart of TJX, below, we have mixed signals. Prices are above the rising 40-week average line. The weekly OBV line has been moving sideways the past three months. In the lower panel is the 12-week moment study which shows that momentum has been weakening since the middle of January.
In this Point and Figure chart of TJX, below, we can see a potential upside price target of $95. The price action since March (look for the "3") is basically sideways but a rally to $86 will be bullish and a decline below $80.00 will be bearish.
Bottom line: TJX is still in an uptrend but diminished volume and weaker price momentum tells me we should raise sell stops to a break below $80.
