JC Penney Company Inc (NYSE: JCP)

J. C. Penney Company, Inc., through its subsidiary, J. C. Penney Corporation, Inc., sells merchandise through department stores in the United States. The company sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products, and home furnishings, as well as provides various services, including styling salon, optical, portrait photography, and custom decorating.
Take a look at the 1-year chart of Penney’s (NYSE: JCP) with the added notations:

After trading mostly sideways from March through July, JCP took off to new highs. Unfortunately, the stock fell off a cliff after that. You will notice that since March the stock has found support at $7 (blue) whenever that level has been approached. Now the stock is almost there again. Traders should be able to expect some sort of bounce, but if not, new lows for the year will follow.

The Tale of the Tape: JCP has a key level of support at $7. A trader could enter a long position at $7 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.
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