Macy’s  (M) - Get Report stock is showing some resilience on Monday, shaking off a premarket drop and rising 3%.

Weighing on the stock early was a downgrade to sell from neutral at Goldman Sachs. The analysts assigned a $12 price target, implying roughly 20% downside.

Does that make Macy’s stock a sell for investors?

Despite the headline, the shares are higher on a day when the broader market is about flat. In other words, buyers are stepping in and gobbling up the weakness in Macy’s.

That’s generally a bullish sign and is a good reason for Real Money to select Macy’s as Stock of the Day. Let’s take a closer look at the charts.

Home Depot is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells HD? Learn more now.

Trading Macy’s Stock

Weekly chart of Macy's stock. 

Weekly chart of Macy's stock. 

While Macy’s stock is rallying on a negative headline -- a bullish reaction to a bearish news item -- don’t mistake the Cincinnati retailer for Target  (TGT) - Get Report or Home Depot  (HD) - Get Report.

Nonetheless, the stock is starting to put in a series of higher lows, as shown via up-trend support (blue line). That’s evident on the weekly chart above, as well as the daily chart below.

On the weekly chart, it’s evident how significant the $17 level has been for Macy’s stock. With the stock now making a series of higher lows, bulls are hoping the shares can rally back to $17 and eventually break out over this mark. Above it could send the stock to the declining 50-week moving average, as well as downtrend resistance (purple line).

So what does Macy’s stock have to do in order to rally to $17 resistance?

Daily chart of Macy's stock. 

Daily chart of Macy's stock. 

First, the stock must avoid making new lows. Ideal would be for Macy's to maintain above up-trend support (blue line). 

Further, to reach $17 it will need to hurdle the 20-day and 50-day moving averages. Over the past month or so, these moving averages have acted as resistance. Clearing them could give M stock the necessary momentum to run higher.

The bottom line: Watch up-trend support on the downside and the 20-day and 50-day moving averages on the upside. A break of either could kickstart a further move in the respective direction.