TJX Cos. (TJX) gapped higher on Wednesday and the share price is building on those gains today. TJX was even downgraded Thursday by TheStreet.com's quantitative service.
Let's check out the charts and indicators.
In this daily bar chart of TJX, below, we can see prices weakened from January to the middle of May. TJX is testing the declining 50-day moving average line but remains below the declining 200-day line. The trading volume has surged higher in recent days.
The On-Balance-Volume (OBV) line has actually risen since early October. The 12-day price momentum study shows equal lows from January to May even though prices made lower lows. This is a category of bullish divergence and can at times foreshadow higher prices.
In this weekly Japanese candlestick chart of TJX, below, we can see lower shadows on the two most recent candle patterns. Prices are still below the declining 40-week moving average line. The weekly OBV line shows a decline but with the most recent plot an uptick. The 12-week price momentum study shows improving momentum which is a bullish divergence when compared to the price action.
In this daily Point and Figure chart of TJX, below, we can see a bullish price target in the $80 area.
In this weekly Point and Figure chart of TJX, below, we can see a potential downside price target in the $41 area. A rally in TJX would go a long way to changing this forecast.
Bottom line strategy: Traders who can afford to risk a dip to $55 could begin to probe the long side of TJX.
