JC Penny JCP: Chart Says This Doomed Retailer Could Plummet 73%

The conflict in Syria, combined with fears of Federal Reserve tapering bond purchases, has caused market jitters. On concern over a U.S.-led attack, the S&P 500 gapped below the 50-day moving average this week, creating a steep downtrend. Only a close above 1,670 would reverse this.

For the first time in many months, I am not recommending a new long position in this column. My strategy is to instead short vulnerable stocks that display technical and fundamental weakness until the S&P's downtrend line is broken to the upside.

The failing retailer J.C. Penney (NYSE: JCP) fits this bill. The department store chain has been struggling since shares peaked at an all-time high near $82 in 2007. With declining sales, a failed attempt to rebrand itself and lackluster quarterly results, the stock is currently trading at just over $12. And shares look like they could fall further.  (more)

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