Did you see this shot across the bow in TJX? (September 27, 2012)

by DAN TJX 
Good evening; I’m Dan Fitzpatrick at Stock and now OptionMarketMentor.com on Thursday, September 27th. I want to look at TJ Maxx ( $TJX TJX Companies, Inc ). Those of you that have been around a while know that I’ve been a big fan of this stock for a while. It’s been in a nice run but this is what I call, it’s my own little invention, it’s called “the shot across the bow.” This is what I’m talking about; stocks, when they’re in a nice uptrend that’s great, ultimately though what often happens is they start to get really choppy; you see how this is so much choppier than this area here, which is just more directional in nature. So it’s choppy and then finally, okay great, we get a nice continuation of the trend, but you can see how choppy it is still, relative to like back here and even back here; it’s just a lot choppier. I think of it as a stock just kind of flopping around, you know there’s a lot of big selling and then there’s a lot of big buying and then there’s a lot of big selling etcetera, etcetera. But if you look at what’s happened recently, look at the red bars here, lot of green bars back here, but that was then, this is now. Look at these red bars, a greater number of red bars that are above average volume than the green ones, particularly recently. So why am I saying this? What often happens with these stocks that are trending higher, at some point they go lower; I’m not saying that TJ Maxx ( $TJX TJX Companies, Inc ) is going to do this, but at some point they go lower. And you know what happens? When you get about here on the chart you look back and you say, “I guess that really meant something, I didn’t see it at the time because TJ Maxx ( $TJX TJX Companies, Inc ) or whatever the stock was, it recovered really quickly and so I thought it was just kind of a blip on the screen and then I figured that the stock would just keep on doing this.” But it didn’t do this, instead it recovered and then started rolling over and only finally, when you’re here, you look back then you say, “Well,” and in my vernacular, “that was the bears first shot across the bow,” that’s the first time when they said, “watch out baby I’m coming.” So this is the first real evidence that there’s not the kind of demand for TJ Maxx ( $TJX TJX Companies, Inc ) that there was back here. You see a big move below the 50-day moving average, and by the way, yes, I see this volatility squeeze, the stocks been trading sideways for long enough to where the stock falls right out of this squeeze. I would say that’s the end of phase one now we’re starting to get phase two, which is a test of the breakout or in this case of breakdown; now we’ll see whether TJ Maxx ( $TJX TJX Companies, Inc ) continues on it’s upturn. But I’ll just tell you this, this is, in my view, an opportunity to take profits, if you’re long the stock you know you can always buy it back if you want to but this has been a really nice ride; so if you’re long this stock I would suggest, when it gets up to the 46’s, anywhere like that, use the strength to take advantage of the selling opportunity, because this shot across the bow typically means something, it just doesn’t mean something until later. Okay members, get over to the Strategy Session, I got a little bit to say.

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