Boston, MA 10/07/2014 (wallstreetpr) – J C Penney Company Inc (NYSE:JCP) (Closed: 9.44, Down: 5.60%) reversed to the downside sharply after two days of positive closing. In the last few days, the bears have increased their shorts and that may have weighed heavy on the stock. The current short float stands at 29.66% of all shares. In the short term, for the last 6 sessions, the stock is actually stuck in the range of $9.17-$10.20 and no matter how volatile it looks; the net movement has been insignificant. The daily candle formed on Monday is bearish but the range robs most of the significance of the pattern.
J C Penney Company Inc (NYSE:JCP) will be conducting its analyst meet tomorrow, on September 8th and is expected to announce more store closings. The company currently possesses 1062 stores in operation but plans to bring the number down to less than 1000. The closest rival Macy’s has 836 stores which may be helping it better from the perspective of efficiency and competitiveness compared to J C Penney Company Inc (NYSE:JCP). In the current global environment of the online business and same-day delivery, the company must shed all its fat.
The long term picture hasn’t been rosy but the last bear market that has begun from 2012 high of $43.18, still doesn’t show any sign of reversing. From that perspective, the price action this year is just a pause in the downtrend and will take a lot of base building to consider it as the ground for a long term uptrend.
In the short term, J C Penney Company Inc (NYSE:JCP) stock price stands at a decisive level. From March 2014, all movement has been contained perfectly by a slightly rising channel which is providing support right now at $9.15-$8.95 levels. As long as this trendline support remains intact, the possibility of another bounce can’t be ruled out. A break below $8.95 on the other hand, will drag the price down to $8.50-20 levels.