We've Shifted Our TJX Trading Strategy

I have not checked back in with shares of TJX Companies  (TJX) since my review way back May 19, but traders who went long risking to $55 are wondering what to do now as prices reached our Point and Figure chart price target of $80. 

Let's visit the charts again. 

In the daily bar chart of TJX, below, I can see some "aging" of the advance. The shares have been trading sideways around $80 the past three months. The 50-day moving average line has turned sideways. The slope of the 200-day moving average is still positive. The trading volume shows a slight decline from the middle of November.

The On-Balance-Volume (OBV) line has drifted lower since late November. The 12-day price momentum study shows a lower high from November to January even though prices made a higher high. This is a bearish divergence and could foreshadow price weakness ahead. 

In the weekly Japanese candlestick chart of TJX, below, I see a weakening picture. The shares have stalled after reaching a Point and Figure chart price target. Some upper shadows can be seen telling us that traders are rejecting the highs.

The weekly OBV line shows weakness from the middle of November. The Moving Average Convergence Divergence (MACD) oscillator has crossed to the downside for a take profit sell signal. 

In this daily Point and Figure chart of TJX, below, I can see a potential downside price target in the $74 area. 

In this weekly Point and Figure chart of TJX, below, I can see the same $74 price target as the daily chart above. 

Bottom-line strategy: The charts and indicators of TJX are telling me that a downside correction is possible. It could be shallow or we could have something deep. I don't know but the safest strategy would be to take profits on longs and see how things develop.

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