This week, one of the largest US department stores, Macy's Inc (NYSE: M), reported its Q2 earnings, where the company suffered a net loss of USD 431mln, compared to a gain of USD 81mln for the same period a year earlier. However, on the positive side, the company’s online sales have grown by 53%, boosted by health and fitness products, together with home décor goods. It is no secret that Macy’s got heavily affected by this year’s pandemic, which forced the company’s stores to close. Although the stores started reopening this summer, still, that wasn’t enough to drag shoppers in. Normally, the second half of the year for many US departments stores is seen as the time to increase their sales, as shoppers tend to start preparing for the autumn and winter holidays. That said, this year will be an exceptional one, as it is believed that not many shoppers will physically visit stores. Given that Macy’s saw a huge spike in their online sales, the company will most likely make a huge emphasis on virtual shopping. If that proves successful for the company once again, they may start focusing more online, which might be more cost-effective than running their departments stores. Such an approach could help save the iconic US retailer from going under and could even create competition to other well-known online stores.
From the technical perspective, looking at Macy’s stock on our 4-hour chart, we can see that yesterday, the price shot sharply to the upside, but eventually lost all its gains by the end of the trading session. That said, M continues to float above a short-term upside support line drawn from the low of August 21st, which might keep a few new buyers interested. If that upside line stays intact, there might be another upmove in the works, hence why we will stay somewhat positive, for now.
As mentioned above, if the aforementioned upside line remains unbroken, that could invite a few new buyers into the game. If so, M may rise above the 7.15 obstacle and target the 7.62 hurdle, or even the 7.78 barrier, marked by yesterday’s high. That might stall the price temporarily, however, if the buying-interest is still strong, a break of that barrier may clear the way to the high of June 16th, at 8.22.
The RSI is currently flat but remains above 50. The MACD is also slightly on the flat side, however, it is still running above the zero and trigger lines. For now, both indicators are showing that the momentum is still to the upside, which seems to be in support of the above discussed scenario.
Alternatively, if the aforementioned upside line breaks and the price falls below the 6.79 hurdle, marked by yesterday’s low, that could spook some new buyers from entering any time soon. Such a move may open the door for a decline to the 6.50 obstacle, a break of which might send the stock towards the low of August 21st, at 6.21.
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