Here’s your trade on Macy’s (M) (January 10, 2019)
M CVX
Macy’s ( NYSE: M ). Here’s the deal: The company guided down, they basically said, “Okay, everybody knows all the clothes in our stores suck. Nobody is shopping here and so we are guiding you down.”
Then this is what happens to the stock; at one point the stock was down about 20 percent. It has already been in a downtrend. We can go back here and take a walk down memory lane, but we aren’t going to, and say it could even be like a double or a triple top. Who cares about that? The stock printed a lower high here, then a lower high again, then a lower high again. So this is decisively in a downtrend, there is no question about it; it’s in a downtrend.
So how are we going to trade this? I wouldn’t buy Macy’s ( NYSE: M ) for any reason other than a quick trade. Now, if the stock gets down here and this dividend yield goes from 5 up to 7 or 8, something like that, then maybe that would be a different story. But a 5 percent yield, if I am a big money manager this isn’t getting my attention; I am probably still thinking about selling.
This is how I would trade this stock: Frankly, if the stock trades down here at all DO NOT TOUCH IT I would just totally stay away from this stock. If, on the other hand, it starts to rally above today’s intraday high of 26.83, we’ll call it 26.85, let’s call it 27.00; if it starts to rally above $27.00 (and set your alerts for it), if it rallies above $27.00 you could get a pretty nice move out of this; maybe 1.5 or 2 points and on a $27.00 stock, that works. It is this kind of market; you would literally be playing the rubber band trade. That is really what you would be looking for, maybe 28.50.
Now, if you really want to get aggressive you can do it in a different way. The close here was 26.11 so we will go back to the hour here, the close here was 26.11; this was the big opening here. Let’s go to a 15-minute chart, if you wanted to you could say, “You know what I really care about? I don’t really care so much about this. I care about this, this last high here.” If the stock trades above 26.20 then you can kind of start a position, and it probably will tomorrow morning.
You could start a small position but you would have to have a stop, like a 3 percent stop, you would have to have a stop down here. You are taking an early entry and then if the stock gets above today’s intraday high, that is when you would take a bigger position. Then don’t get too greedy; if it goes up $1.50 I would start selling.
That is my trade idea for Macy’s ( NYSE: M ). Don’t push it; don’t try to force an opportunity. Instead, try to identify one. If it’s there, awesome, if it’s not, it’s not it’s not.
By the way, in case you are just a freebie viewer, which is fine, I talked about Chevron ( NYSE: CVX ) a couple days ago as a potential short because it had failed so far at the 50-day moving average, I put in our premium video tonight, that I didn’t short this stock but I would close this out if I did. Because after the stock goes up here if it doesn’t pull back right away it’s because there are buyers. The volume is up more than it was the previous two days; today was okay too.
What I am saying is, in this kind of market, where there is money coming back in, I would be real skittish on shorts. I think you would be kind of trading against the grain, so to speak, and a lot of times that doesn’t work out real well. I just thought I would mention this to you because I mentioned it to members and I didn’t want to leave anybody hanging. So I would close this out or at least watch it really, really carefully. If it does start trading above the 50-day moving average, life is too short to be short an energy stock. You don’t really need that kind of brain damage.
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