By definition, the stock continues to have momentum characteristics after setting an all-time intra-day high at $64.82 on Nov. 7. As a momentum stock, its weekly chart is positive but overbought with Friday's close above the key weekly moving average at $61.59 with overbought weekly momentum.
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The parent of Home Goods, Marshalls and TJ Maxx reports third-quarter earnings before the opening bell on Tuesday. Analysts expect the company to report earnings of 85 cents a share.
Home Goods sells discounted products for every room, plus livable outdoor areas. TJ Maxx offers brand-name apparel, jewelry and accessories at discounted prices, while Marshalls expands the product line to discounted designer goods.
These product lines, at affordable prices, help wealthy consumers save a buck on quality items and allow consumers on a budget to find bargains. Discount retailers should be in the sweet spot during this year's holiday shopping season.
Meanwhile, investors should always have an exit strategy when investing and trading momentum stocks.
Have a price target and enter a "good 'til canceled" limit order to book profits on strength to that level.
Have an exit strategy following a rising key weekly moving average. As momentum continues and the stock moves higher, this moving average will rise each week. Enter a sell-stop to lock in gains if the stock falls below this average.