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.
