For his second "Executive Decision" segment of Tuesday night's Mad Money program, Jim Cramer spoke with Jeff Gennette, chairman and CEO of Macy's (M) , the iconic retailer.
Gennette said that Macy's continues to execute on its strategy of becoming a digitally-led, omnichannel retailer. The company added seven million new customers last year and four million of those came from digital, he said.
Digital sales totaled $6 billion in 2020 and is growing at 25%, Gennette added.
The key to Macy's digital success has been its stores, Gennette noted. Nearly 25% of their digital orders route through their stores.
Macy's continues to shed underperforming stores in lower-quality malls, but Gennette said that stores are a critical component to the brand and they have begun experimenting with off-mall concept stores as well.
Let's visit with the charts.
In this daily bar chart of M, below, we can see that prices have recovered over the past 12 months. M was languishing in the $5 area this time a year ago and now trades as a teenager. Prices are testing the rising 50-day moving average line and are comfortably above the rising 200-day average line. Trading volume has been diminishing since June and that is not a good picture for chart readers like myself.
The On-Balance-Volume (OBV) line has been flat/neutral the past two months and that could be a problem for further price gains.
The trend-following Moving Average Convergence Divergence (MACD) oscillator turned bullish in November but currently is heading back down to the zero line and tells us that the current trend is lacking strength.
In this weekly Japanese candlestick chart of M, below, we see a mixed picture. Prices broke a longer-term downtrend and now are in an uptrend above the rising 40-week moving average line.
The weekly OBV line shows strength from October but it has weakened over the past few weeks.
The MACD oscillator is pointed up and well above the zero line but it has narrowed this month. Two upper shadows around $20 suggest that resistance above $20 may be an obstacle for the time being.
In this daily Point and Figure chart of M, below, we can see a potential downside price target in the $10-$9 area.
In this weekly Point and Figure chart of M, below, we see that the software suggests a bullish target of $23 or so.
Bottom line strategy: Flip a coin on this one. Seriously, the charts suggest that M could rally to $23 or up $7 or decline to $9 or down $7. Movement of the broad market will probably tip the scales.
