NEW YORK (TheStreet) -- Consumers looking for bargains during the 2014 holiday shopping season bought discounted brand named apparel, footwear and home goods at Kohl's (KSS), Ross Stores (ROST) and TJX Companies (TJX). Each of these popular stores set all-time intraday highs in late March into early April before losing technical momentum. Here's how to trade this downside volatility.
Investors should continue to study "must see" daily and weekly charts to judge the risk and reward for discount retailers for the remainder of 2015. Chart analysis and key levels at which to buy on weakness of to sell on strength establish prudent active investment strategies.
Investors not familiar with technical analysis should begin with the notion that a price chart for a stock shows a road map of past price performance, which provides guidance for predicting future share price direction.
Here's how to read a daily chart. There are two moving averages to follow; the 50-day simple moving average is in blue while the 200-day simple moving average is in green.Here's how to read a weekly chart. This chart shows weekly price bars going back to the beginning of 2009 when the current bull market for stocks began. The red line tracks the ups and downs of the key weekly moving average. The green line is the 200-week simple moving average. The red line that oscillates along the bottom of the chart is the momentum reading on a scale of 00.00 to 100.00. A reading below 20.00 is oversold and a reading above 80.00 is overbought. A technically positive weekly chart occurs when a stock ends a week above its key weekly moving average with the momentum reading rising above 20.00.
A technically negative weekly chart occurs when a stock ends a week below its key weekly moving average with the momentum reading declining below 80.00.
Here's the daily chart for Kohl's.