Here’s the short story on $TJX – February 24, 2023

TJX SP-500 

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I have got just one stock ( NYSE: TJX ) that I want you to see today. It is really not a buy, I will just say right off the bat, this market really, really sucks right now because there are just no real setups. Just look at the S&P ( INDEXSP: .INX ) it is just in a real kind of choppy range, it’s been that way for a while. All the good stuff that happened in January is kind of gradually being worn down and washed away in February.

This is the way of markets and so it is important for you to understand that, or you are going to wind up being on the right side of the trend and then the wrong side trend and you are going to go back and forth. And at the end of it all you are ultimately going to realize, that all you got was tired, you didn’t really make any progress. So just be mindful of that.

Now, TJX ( NYSE: TJX ). This looked like it could give us a nice move higher because of the way it was consolidating here. But when you look at this now, this really looks like it rallied up to a ledge. I could draw 4 cup and handles here if I wanted to. But it looked like it was at a really, really nice area where it could rally higher.

Instead, it did just the exact opposite, it fell out of this range and it has fallen below these levels here. Now, where you could have made the argument that the 50-day moving average was support, now it has to be looked at as resistance.

So this is what I would suggest doing. If you are looking for a short, don’t short this here but watch it. Because this is what you are going to want to see if this is going to turn into a good short. This is how that is going to work out, it may churn around here for a bit or it might even run a little bit lower but you want to just watch it. And then if starts running up here, again, look to see when or if the stock kind of peaks.

If it holds just below the 50-day moving average, the first day that it starts to fall, like the first day that it comes down, that’s when you short the stock and you have a tight buy stop right back up here. That is a lower-risk short. Not shorting it here, just assuming it is going to keep going down, if only shorting were that easy, it is just not.

Instead, you want to wait, wait for your short to set up. Again, if the stock rallies back up to test the 50 and then starts to fail, that’s when you can short the stock. It is really just the flip side of a pullback buy before a stock starts running higher.

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