J.C. Penney (JCP) closed above $10. This is probably just the beginning of a 50% move. (August 19, 2014)
I want to draw your attention back to J.C. Penney ( NYSE:JCP ), I’ve been featuring this regularly. I was on Jim Cramer’s show, “Mad Money” a couple of weeks ago and talking about this as one you should buy, even before earnings, because I had a pretty steep projection of about $15.00. I just want to go through this, and this is why: because I know traders, I’ve been working with traders for decades, for a long time, and traders are almost by definition stricken with ADD. Let’s just say that you probably have ADD and if you disagree with me it’s probably because your attention drifted during the first part of what I said and so you don’t remember what I started talking about.
What I’m saying is, it’s easy to lose track of this stock, but the point that I was making in covering it was this head and shoulder pattern; left shoulder, head, really like a right shoulder with a line drawn, we’ll draw it there, the difference is about $5.00 between the bottom here at 5.00 and really this neckline at about 10.00. So you add $5.00, we’ll call $10.00 the resistance level, you add $5.00 to this and you get an upside price target of $15.00 and that’s about 50 percent above where this stock is now. I’m pretty much sticking with that price target, I didn’t look at a balance sheet or and income statement, I’ll leave that for other guys who are a lot smarter than me but don’t trade, they’ll tell you about all that kind of stuff.
What I’m telling you is, this stock ultimately moves higher, but it’s on a weekly chart, so don’t look for $11.00 by Thursday; maybe it will happen, don’t look for $11.00 though. Don’t look for $12.00 in October, maybe that will happen too; but this is a multi-month pattern so you have to give this multiple months, in terms of your expectation, to hit $15.00. But I do think that’s where it’s going, and I do think that what you want to be doing is using a trailing stop if you can, or just buy a little bit to begin with and then buy a little more when the stock is moving in your favor; in that way you get involved, but you’re not taking a big position until you’re profitable in your little position.
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