• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

My Gut Says the Risk in Macy's Is to the Downside

Why? If savvy investors knew something really positive about the retailer they would have been more aggressive buyers.
By BRUCE KAMICH
Nov 14, 2018 | 08:50 AM EST
Stocks quotes in this article: M, AMZN

Macy's Inc. (M) will be reporting its third-quarter results here on Wednesday. Legions of retail analysts and competitors will be poring over the numbers looking for trends and clues to what may or may not be working in this important sector. Maybe even execs at Amazon.com Inc. (AMZN) will be paying notice. For myself I will be looking at the charts and indicators to see what clues and signals I can pick up from investors who have been buying and selling the stock of Macy's.

The last time I visited M was at the end of August. At that time I wrote, "Patient Macy's bulls doubled their money -- is that enough? Maybe. Raise stop protection to $34 and let's see how things develop." Over the past two-and-a-half months Macy's slowly declined to around $32, stopping out our long recommendation. Prices recently firmed back to around $38. What else is going on?

In this daily bar chart of M, below, we can see prices are above the rising 50-day moving average line and the bullish 200-day line. M tested the 200-day line through much of October, and closes below the line did not precipitate a downtrend. Since June the daily On-Balance-Volume (OBV) line has been flat, which suggests a balance between buyers and sellers even though prices have moved in an $8 range. In the lower panel is the trend-following Moving Average Convergence Divergence (MACD) oscillator, which is above the zero line but narrowing toward a possible crossover to the downside; that would be a take-profits sell signal.

In this weekly bar chart of M, below, we can see mixed signals since our review at the end of August. Prices are above the rising 40-week moving average line, but just barely. The weekly OBV line is still in a downtrend from early June even though it improved in October. The weekly MACD oscillator has narrowed in recent weeks and could turn up or down depending on the next move for M.

In this Point and Figure chart of M, below, we can see an upside price target of $41.74 being projected -- bullish, but not a new high for the move. We also can see that prices are in a down column and that a decline to $33.59 would be a new low for the move down.

Bottom line strategy: Investors probably are rooting for Macy's to succeed in this new world of retail, but since June they have not been aggressive buyers nor sellers. My gut (yes, this is totally non-scientific) says the risk is on the downside. Why? If savvy investors knew something really positive about M they would have been more aggressive buyers.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are restricted from trading individual securities.

TAGS: Investing | Stocks | Consumer | Retail

More from Stocks

Target's Charts Are Getting Out of Range for the Bulls

Bruce Kamich
Mar 1, 2021 11:45 AM EST

I would stand aside through this earnings release.

The Bond Market vs the Fed

Bob Lang
Mar 1, 2021 11:30 AM EST

Bond holders fear inflation with a passion.

Verizon: The Risk Is to the Upside

Stephen Guilfoyle
Mar 1, 2021 11:00 AM EST

There is potential to turn VZ from a stable telecom into a 'growthy' type name.

There's an Oversupply of Positive Action Right Now

James "Rev Shark" DePorre
Mar 1, 2021 10:39 AM EST

The longer this continues, the more anxiety there will be about being underinvested.

Rocket Companies Is Not Ready to Blast Off

Bruce Kamich
Mar 1, 2021 10:36 AM EST

The company went public seven months ago.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 08:09 AM EST GARY BERMAN

    Monday Morning Fibocall for 3/1/2021

    Always a good idea to know where our bounce zones ...
  • 11:51 AM EST REAL MONEY

    Watch Bob Lang and Doug Kass Discuss Short-Selling!

    Bob Lang and Doug Kass with an engaging and educat...
  • 11:32 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Navigating a Market Correction
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login