After Acquiring My Downside Target Macy’s is very compelling here

Posted on Tuesday May 24, 2016

Update 6/2/2016

This trade is now complete. Our target Has been acquired. We now have to wait for the next setup to present itself. 

 

 

Update Chart of Trade: 5/28/2016

 

Original Post:

For a long time now, I have been talking about watching Macy’s after it acquires the 61.8 fib retrace from the 2009 bottom to the 2015 top.
When a stock get’s beat down like this, it almost always hit’s it’s 61.8 fib, so I wanted to be patient and let it hit.

There are a ton of people way under water in this one, so it is not going back to 75 without a bottom, and may never see that number again. That being said the price action is getting compelling for at the very least a trade that we can continue to evaluate if and when upside targets can get acquired.

Going into earnings this one had trouble written all over it. If you watch price action like I do, it is no surprise what happen here.  The downside H&S target was 32.62 and was easily acquired and now the 61.8 fib as well. The stock is seeing some accumulation there.

Here we can see the sell off to the 61.8 Fib since the 2009 bottom. This should act as a buying opp if you believe in this company.

We have hovered at this 61.8 fib level since the earnings miss and forming what looks like an inverse H&S pattern on the lower time frames (30 min)

The VWAP from the lows is right in the high 30s – 31, so possible it pulls back into that level.

But if this pattern can trigger it would target pre-gap fill resistance at ~34.

I think it is worth a watch.

This pattern self destructs below the lows at 29.94, so I definitely don’t want to own it below that level. It could double bottom there, but we would have to re-evaluate.

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