February 2, 2010
Shares of JC Penny Inc (NYSE: JCP) had a nice bounce on Monday, February 1, but unfortunately, this company’s share prices have more downside ahead.
JC Penny had a nice run from the bear market lows in March, 2009 to the rally highs in October 2009. Prices rose 59.6% in only ten months. But since October the declines have been vicious and steady, loping 22.8% off in three months.
JC Penny’s 1.5% rally on Monday was welcome relief, but unfortunately the lows reached last week broke important support levels at $25.46. JC Penny should still decline to at least $22.68, another 10% lower than Monday’s close.
The $22.68 level, when reached, will be critical support for JC Penny. If share prices close lower, them expect to run all the way to the $15.00 level in coming months.
A bullish reversal day could mark a bottom near the $22.68 level, but we would be wary of this stock and keep our stop tight if a bullish position is then taken.
Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.
Disclosure: No positions