• 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

TJX Could Grind Higher, but Don't Trust the Gains

The stock price of discounter TJX, parent of TJ Maxx, Marshall's and HomeGoods, has a bit more room to grow, but investors should be careful not to get too bullish.
By BRUCE KAMICH
Mar 14, 2019 | 02:15 PM EDT
Stocks quotes in this article: TJX

There are many retailers having success with bricks-and-mortar stores, Cramer told viewers during Wednesday's Mad Money program on CNBC, and TJX Cos., Inc. (TJX) , parent of TJ Maxx, Marshall's and HomeGoods, is certainly one of them.

Cramer explained that TJX is a discounter, which means the company buys up excess inventory from department stores, then sells it on the cheap to customers. This means TJX not only works in any economy, but it also makes the company immune to Amazon, as customers will always find a better price at TJ Maxx and Marshall's. The treasure-hunt experience of their stores makes finding these bargains even more enjoyable to many shoppers.

That's why Wall Street got it wrong this past November, Cramer said, when they sold TJX shares down from $56 to $49 before the company reported, and down to lows near $41 a share by December. While TJX reported a good quarter, they also issued imperfect guidance, setting up an "UPOD" scenario of under-promising and over-delivering later on.

Let's look at the charts and indicators to see what investors are doing now.

In this daily bar chart of TJX, below, we can see that prices have rallied about $10 per share from their December low. TJX is now sitting below a three-month resistance that is from September to November. Prices are trading above the rising 50-day and 200-day moving averages, but this location does not look all that strong with uneven volume figures the past three months and only a slightly rising On-Balance-Volume (OBV) line.

The 12-day price momentum chart in the bottom panel shows weaker momentum peaks from January to March, telling us prices are going up at a slower and slower pace. This is a bearish divergence when compared to prices, but this is not an automatic sell signal. The price rise could continue to slow, but that does not mandate that prices turn down.

Momentum is a leading indicator -- like an amber traffic light.

In this weekly bar chart of TJX, below, we see a mixed picture. Prices are above the rising 40-week moving average line, but it will not take much of a decline to break the line. The weekly OBV line is at a new high, but prices are well below their price high.

Normally, I would suggest the OBV line is leading the price action, but I am not that sure with this instance.

The weekly MACD oscillator crossed above the zero line for an outright go-long signal.

In this Point and Figure chart of TJX, below, we can see an upside price target of $56.31 being projected, but a decline to $50.51 would be bearish.

Bottom-line strategy: With momentum slowing and the OBV line not "setting the world on fire," I am not an enthusiastic bull on TJX.

If you are long on TJX from lower levels, I would risk a close below $49 for now.

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 | Technical Analysis | Retail | E-Commerce

More from Investing

When it Comes Time to Sell, Will You Act or Will You Freeze?

James "Rev Shark" DePorre
Jan 16, 2021 10:00 AM EST

Why don't more people embrace the ease and power of selling stocks? Why do they freeze and do nothing as losses build?

Cybersecurity Stocks that Lagged in 2020 Could Get Boost from SolarWinds Hack

Eric Jhonsa
Jan 16, 2021 8:00 AM EST

The hack stands to drive an uptick in corporate and government spending to protect both on-premise and cloud assets.

Hungry Traders and Stock Opportunities Aren't Likely to Go Away Soon

James "Rev Shark" DePorre
Jan 15, 2021 4:40 PM EST

It doesn't take much time for stocks with strong momentum to reset and continue on their way.

At What Price Is Ballard Power Systems a Buy?

Bruce Kamich
Jan 15, 2021 3:09 PM EST

Let's check out the latest charts of BLDP.

United Parcel Service Is Testing Key Support

Bruce Kamich
Jan 15, 2021 2:30 PM EST

A look at the charts of UPS.

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

  • 09:01 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    When it's time to sell, will you act or freeze?
  • 08:35 AM EST GARY BERMAN

    Wednesday Morning Fibocall for 1/13/2021

    Lower highs... SPX (Long-Term View) The 1/8/2...
  • 08:07 AM EST GARY BERMAN

    Tuesday Morning Fibocall for 1/12/2021

    Watch if the recent trend of lower highs continues...
  • 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