Tiffany & Co. (TIF) is a landmark on 57th Street, but is it a worthy investment? Let's look at the charts after its most recent quarterly report.
TIF was a great investment from its 2011 low until the end of 2014. The price of this renowned retailer with its iconic blue bags and boxes more than doubled.
The story in the past year for TIF is different and the chart is "pitted" with some important price gaps. Gaps are price voids created as the supply and demand for a security adjusts to news that was not already discounted.
TIF gapped sharply lower in January 2015. Prices eventually stabilized and actually made an upside gap in May. Prices were unable to build much on this gap and rolled over, turning down in the past month.
TIF has been trying to hold in the mid-to-low-$80s, a key level on the chart that has acted as support several times as can be seen in this chart below.
Support and resistance are terms used by chartists and help describe the price action. A support is an area or zone of price consolidation or congestion where buyers overcome selling pressure. Resistance is a level or area at which sellers overcome buying pressure.
Notice how the mid-$80s has acted as support several times. When support is broken (prices move below the support area) it can become resistance as traders who might still own TIF become sellers to get out at their entry price.
So what's inside the blue box now? It could be something tarnished. A breakdown in the price of TIF could carry to the next support area around $70.