What About Macy’s?

• Posted by Greg Harmon
• on June 4th, 2014

Macy’s, $M, has long been a favorite retail stock among traders and investors and comes with a decent dividend of over 2%. But is also is a stock that can be used to visualize the dichotomy of views on the market between bullish and ready to move higher, and gone to far and in need of a pullback. The first chart below paints the bullish case. After a run higher from February the stock pulled back through April and into May before moving back higher. The price action has traced out a Cup and Handle pattern and with today’s candle may be ready to break higher. This would trigger a target of 65-66. Nearly a 10% move higher from the current level.

But the second chart shows that the Cup above, can also be viewed as a near perfect bearish Gartley harmonic. A move lower here, that could be interpreted as a continuation of the Handle on the Cup and Handle pattern, would actually trigger the reversal on the Gartley and target a move lower to at least 58.80 and 57.28 should it go beyond. Only a 5% pullback but a pullback none the less. Which way do you see it?

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