TJX Cos. (TJX) has rallied strongly so far this calendar year but is the best price performance now in the rear-view mirror?
Let's check out the charts and indicators of TJX to see if we should be a buyer or return things for a store credit. We reviewed the charts of TJX at the end of September where I wrote that "Looking over the charts and indicators of TJX and seeing how they are extended by certain measures tells me to be cautious and suggest that traders raise stops to protect some really good profits." With the broader market averages under selling pressure this month another look at TJX seems in order.
In the daily bar chart, below, we can see TJX has been trading flat to down from our last update. Prices are now closer to the rising 50-day moving average line so a test or break of the line is now more likely. The rising 200-day moving average line is now around $90 -- prices are closer than they were at the beginning of September but still what I would considered extended.
The daily On-Balance-Volume (OBV) line is close to its highs but the volume has actually declined in the past two weeks or so. The trend-following Moving Average Convergence Divergence (MACD) oscillator is still in a bearish phase and continues to head toward the zero line.
In the weekly bar chart of TJX, below, we can see that prices are above the rising 40-week moving average line -- maybe too far above the line. The weekly OBV line has been stalled the past two months and could turn up or down from here. A turn lower for the OBV line would tell us that sellers are liquidating prior longs.
The MACD oscillator on this longer time frame has been narrowing and is close to a bearish downside cross. This would be a signal to take profits.
In this Point and Figure chart of TJX, below, we can see that prices are extended. A $91.85 price target has been met and exceeded. A decline to $106.54 will weaken this chart.
Bottom-line strategy: TJX made sideways corrections in March and April and in June. This time a correction in TJX could be downward and traders should consider nailing down profits while they can.