TJX Stock Price is Range Bound in the Short Term

The current price pattern (January 28, 2005) of TJX Companies (TJX), an off-price retailer of apparel and home goods, is a bit complicated. From September 2004 through November 2004 prices were on the upside but since then they have repeatedly met resistance around $25.

The price pattern from September 2004 through January 2005 is called an ascending triangle because prices have moved up (green line on chart) but have been constrained by a resistance price (lower black horizontal line on chart. The pattern forms a triangle hence the name ascending triangle.

This price pattern is normally bullish as prices would rise above the $25 resistance on good news from the company. However, if this were to happen, prices would meet strong resistance at the $26 to $27 level (upper black horizontal line on the chart). If prices were not able to move above $26 to $27, a double top could form, which would signal a decline in price.

So what does all of this mean for the stock price of TJX? Unless the company comes out with unexpected good news about sales and earnings, the best the stock will do is stay in the $25 range. In the absence of good news the stock could move down to the low $20 range as investors take profits.