Macy’s Stock Tanks: Look for a Bounce… Then More Pain

Steve Miller

macys stock research investing analysis decline lower bearish chart year 2019

Macy’s (M) Stock Weekly Chart

Macy’s (M) sold off on Thursday morning after the retailer warned that it would not meet its previous guidance for sales and earnings.

Based on its market cycles, Macy’s stock is likely to bounce, but we see it heading even lower in the intermediate term.

Macy’s (M) warned that its net sales would be flat, compared to its previous estimate of between 0.3-0.7%. The company also said its earnings would fall short. This raised concerns for others in the sector, pushing the S&P Retail ETF (XRT) lower by as much as 4%.

CEO Jeff Gennette explained that, “The holiday season began strong, but then weakened and did not return to expected patterns until the week of Christmas.”

Our analysis of the market cycles for Macy’s suggests that it is at the tail end of the declining phase of its current minor cycle.

Upon completion, we expect a bounce and then for the stock to head lower into early-April. Our target is around $22.

For more from Slim, or to learn about cycle analysis, check out the askSlim Market Week show every Friday on our YouTube channel.

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