September 12, 2012 (By Frank Kollar)
The news for J C Penny Inc (NYSE: JCP) has been terrible. Sales tumbled more than 20% during the first half of this year.
But on August 10th, the day J C Penney reported a bigger-than-expected loss and withdrew its earnings guidance for the year, prompting Moody's to lower its debt rating deeper into junk territory, share prices rose 6%.
Our stock timing strategy took a long position in J C Penney on August 22nd and it inspired more than a few emails from subscribers.
Chart Courtesy of StockCharts.com
But we do not look at stock fundamentals. If we did J C Penney would not have been recommended. We identify and trade trends and J C Penney had begun what we identified as a new bullish trend.
Since our entry, J C Penney is up over 20% and we see more gains ahead.
J C Penney is approaching its 61.8% retracement resistance level at $30.09. A decisive close above and we will be looking for shares to climb to and test the $36.00 level.
The Fibtimer.com (http://www.fibtimer.com) Stock Timing Strategy does have a position in J C Penney.
Disclosure: I am long JCP.