The last day of the quarter saw the stock of J C Penney Company Inc (NYSE:JCP) ending the session with a gain of 7.41%, with a volume of 30 million, about 3 times higher than the average volume of 10 million. Still it would be tough to state that the company is enjoying a good time as multiple issues plague it. The company is already facing a whistleblower lawsuit for allegedly systematically overcharging customers. The company had already sued Robert Blatchford, the filer of the case and an ex-employee of the company, for theft of trade secrets but later dropped the case in September 2014. Regardless of the result of this whole affair, the image of the company has already taken a big hit.
J C Penney Company Inc (NYSE:JCP) may be already suffering from the failed attempts to turn things around by the former CEO Ron Johnson. The current management is trying to overhaul the sales techniques and get back to the roots under the leadership of CEO Myron Ullman, but the result remains to be seen before one can feel hopeful about the company, which faces very tough competition from the already successful rivals in both the brick & mortar and the virtual space. The consistent weakness in both topline and bottomline numbers have kept most analysts comfortable with only “sell” rating.
Technically, the stock is a disaster. The short term traders can expect a gradual bounce to $10-$11 but the huge supply area hanging above will push the price down in any extended rally attempts. The area near $14-$15 provided immense support in the last 15 years but once broken, it turned into the strongest resistance area. The declining volume in the recent months is discouraging and no bottom fishing can be recommended.