Traders Should Head to the Checkout Counter at Macy's

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For his second “Executive Decision” segment of Mad Money Thursday evening, Jim Cramer spoke with Jeff Gennette, chairman and CEO of Macy’s (M) .

The iconic retailer posted a huge earnings beat Thursday morning.

Gennette said that Macy’s is in a healthier place than before the pandemic thanks to its digitally led, omnichannel strategy. The retailer is welcoming lots of new customers in new categories, then using personalization to enhance their shopping experience.

Macy’s also announced a partnership to bring installment payments to the company. Gennette explained that younger shoppers have been asking to buy now, pay later.

Macy’s is also launching a new curated digital marketplace platform.

Let’s check out the charts and indicators before the big Thanksgiving Day parade. Our last review of the charts was back on May 19 where we wrote that “Cramer seems to like Macy’s and so does the quant service. As a technician I would trade M from the long side, risking a close below $14 for now. The $27 area is the price target.”

In this updated daily bar chart of M, below, we can see that prices reached our $27 price target last month and continued to soar higher. M is trading above the rising 50-day moving average line and getting close to trading at twice the level of the rising 200-day line which intersects at $20.

The On-Balance-Volume (OBV) line has been very strong since the middle of August and tells us that buyers of M have been more aggressive. This helps the bull case. The Moving Average Convergence Divergence (MACD) oscillator is in a clear bullish alignment above the zero line.

In this weekly Japanese candlestick chart of M, below, we can see a bullish picture for now. Prices are close to reaching twice the level of the rising 40-week line which intersects around $20 – this is a sign of being extended or overbought.

The weekly OBV line has been rising for the past 12 months at least and confirms and supports the price gains. The MACD oscillator is bullish.

In this daily Point and Figure chart of M, below, we can see that prices have reached and slightly exceeded a $35 price target.

In this weekly Point and Figure chart of M, below, we can see a slightly higher price target of $38.

Bottom line strategy: The fundamental story for M sounds like they have made a turnaround and comeback, and the stock price reflects it. Prices have reached a Point and Figure target and are what I would consider extended or overbought. This is the time to nail down profits on longs. You can still watch the parade on television but you will have money to splurge on holiday shopping if you so desire.