TJX Cos. (TJX) looked technically weak heading into the "Trump rally," but prices have staged a reversal. Is this enough to propel share prices of the off-price retailer that is part of the Action Alerts PLUS portfolio to new highs?
Let's look closer at our charts and indicators.
In this one-year daily bar chart of TJX, above, we can see that the price of TJX has not made much upside progress in the past 12 months. Prices are higher than a year ago, but the corrections over the year have lasted longer and gone deeper than holders of TJX probably would have liked. If you traded in and out of the stock, you had some good swings to make money.
As we look toward the end of this calendar year, we have mixed signals for TJX. Prices have rallied back above the now-rising 50-day moving average line and the rising 200-day line. The On-Balance-Volume (OBV) line has moved up and down with the price action this year and only just turned up again in the past five weeks or so.
Volume has expanded this month and the OBV line is pointed in the right direction, but this is not a long period of accumulation that could support a sustained move higher, in my opinion. Momentum is confirming the price gains this month. Let's see if the weekly chart gives us clearer signals.
In this three-year weekly view of TJX, above, we also have mixed signals. Yes, prices are above the rising 40-week moving average line. The volume pattern does not show increasing turnover as prices trend higher, but it does show heavier volume at some of the price lows but also at some of the highs. The OBV line on this time frame generally moves higher until August of this year. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line (bearish) and is a long way from a bullish signal.
Bottom line: At this juncture I don't see the kind of aggressive buying on the charts to anticipate that TJX can power through resistance in the $80-$84 area. I could be surprised. but I would generally expect some sideways trading and new signs of buying before TJX attempts to move above $84.