June 25, 2009
Shares of JC Penny Inc (NYSE: JCP) gained over 138% from their bear market lows to their May 6 highs. But since those highs JC Penny has been correcting.
If you draw a line connecting the daily highs on May 6 and June 2, and also draw a line connecting the daily lows at May 26 and June 22, you will create a pennant shape. The upper line is the declining trend resistance line and the lower is the rising trend support line.
Typically, when pennant patterns form after a substantial advance, they break to the upside and the advance continues.
A few days ago we wrote that if the lows at $24.56 hold, JC Penny could be headed back for a run to its prior rally highs.
It appears that they have. Look for higher highs and a test of the upper declining trend resistance line in coming days.
The Fibtimer.com (http://www.fibtimer.com) Stock Timing Strategy holds a position in JC Penny.
Comments