Five Star Stock Watch: J.C. Penney Company

Everyone has heard that J.C. Penney has problems.

We've heard it for years now. It seems as if everytime the company has left the newswire another negative story surfaces. The stock has reflected that by falling from $87 back in 2007 to under $8 this week.

Can the stock go lower? Judging from the analysis of the stock below, it sure seems as if lower prices are in the cards for J.C. Penney.

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The company: J.C. Penney Company, Inc.

Ticker Symbol: JCP

Sector: Services 

Industry: Department Stores

J.C. Penney Company, Inc. operates department stores. The company sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products, and home furnishings. It also provides various services, such as styling salon, optical, portrait photography, and custom decorating.

As of February 2, 2013, it operated 1,104 department stores in 49 states and Puerto Rico. The company also sells its products through its Internet Website, jcp.com.

Please take a look at the one-year chart of J.C. Penney below with added notations:

During its most recent recovery in October and November, J.C. Penney formed a solid trendline of support. That support broke and the stock fell as one would expect.

After the trendlien break, the stock seemed to find support around $8. Well, now that has broken as well. So, lower prices sure seem to be on the horizon for J.C.Penney.

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BlackBerry isn't set to release earnings until the end of February 2014.

No matter what your strategy, or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Don't forget to check out my previous article on Blackberry!