This time, the stock is falling -- albeit down just 1.5% in midday trading -- after the company reported third-quarter earnings. Given how poorly the stock has performed this year, many bulls are likely shying away from the name.
Oddly though, this dog may be starting to perk up.
Think about it. Macy's stock isn't making new lows despite disclosing a data breach earlier this week and reporting a subpar quarter on Thursday. While earnings beat estimates, revenue and guidance came up short of expectations. Its peers are struggling too.
Yet despite all of this, shares are holding up. That may mean Macy's stock is worth another look. That's why the Real Money team selected it as its Stock of the Day.
Let's look at the charts.
Trading Macy's Stock
Before we start talking about the long setup, let's, of course, remember that this is far from a risk-less play. Macy's stock has been punished for a reason.
When the company disclosed its data breach on Tuesday, shares fell more than 10% and closed below uptrend support (blue line). Further, shares are below all of Macy's major moving averages, while the stock continues to make a series of lower highs. All of these are negative signs.
Yet, as we mentioned in our earnings preview from Wednesday, it's critical that Macy's holds the $13.90 to $14.10 area. Below will thrust shares of the retailer to new 52-week lows and make it a clear no-touch.
However, with this area still holding as support, bulls can start to consider this one on the long side.
On the upside, a few levels deserve focus. First, Macy's stock needs to reclaim the $15 to $15.25 area. That's former uptrend support, as well as the pre-earnings weekly low. From there, the 50-day moving average becomes the focus, up at $15.65.
If -- and that's a big if -- Macy's can reclaim the 50-day moving average, then the path higher gets easier. The gap up toward $16.75 can be filled, while a test of the 100-day moving average north of $17 is possible.
All of this hinges on M stock staying above the ~$14 level though. Keep it simple. Above $14 and Macy's stock is OK. Below, not so much. If it can push through $15 to $15.60, the way higher gets easier.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.