Macy’s, Inc. (NYSE: M)

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Macy’s, Inc., together with its subsidiaries, operates stores and Internet Websites in the United States. Its retail stores and Internet Web sites sell a range of merchandise, including apparel and accessories for men, women, and children; cosmetics; home furnishings; and other consumer goods. The company also operates Bloomingdale’s Outlet stores that offer a range of apparel and accessories, including ready-to-wear, shoes, fashion accessories, jewelry, handbags, and intimate apparel products. As of January 28, 2012, it operated approximately 840 stores under the names of Macy’s and Bloomingdale’s; and 7 Bloomingdale’s Outlet stores, as well as macys.com and bloomingdales.com. The company was formerly known as Federated Department Stores, Inc. and changed its name to Macy’s, Inc. in June 2007. Macy’s, Inc. was founded in 1820 and is based in Cincinnati, Ohio.

To review Macy’s stock, please take a look at the 1-year chart of M (Macy’s, Inc.) below with my added notations:

1-year chart of M (Macy’s, Inc.)

M has created a couple of important price levels to watch. First, M has formed a clear resistance at $42 (navy), which would also be a 52-week high breakout if M could manage to break above it. In addition, the stock is climbing a short term, up-trending support level (red) over the last (2) months. Eventually, M will have to either break the support or the resistance.

The Tale of the Tape: M has an up trending support and a 52-week resistance level to watch. A long trade could be made on a breakout above the $42 resistance or on a pullback down to the uptrending support. A break below the support would be an opportunity to enter a short trade.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT