Why Macy's Stock Continues To Rip Out Of A Pattern Thursday

Macy’s Inc. M shares were trading Thursday higher after the company reported third-quarter EPS results that were higher year-over-year and better-than-expected third-quarter sales results. The company’s fiscal year 2021 guidance was also raised.

Macy’s was up 21.18% at $37.36 Thursday afternoon. 

Macy’s Daily Chart Analysis

• Shares have broken out of what technical traders call an ascending triangle pattern. The stock tested the resistance level from this pattern as support and was able to hold before pushing higher.
• The $20 level was key in the stock’s past, holding it as an area of resistance. Now, this level could become an area of support in the future. In the short term, the higher low trendline may hold as an area of support for the stock to continue the uptrend it has been on.
• The stock trades above both the 50-day moving average (green), and the 200-day moving average (blue), indicating the stock is in a period of bullish sentiment.
• Each of these moving averages may hold as a potential area of support in the future.
• The Relative Strength Index (RSI) has been consolidating right around the overbought range the last few months, showing that the stock has continuously seen a surplus in buyers. The surplus of buyers over sellers explains the rise in price for the stock.

See Related: Why Macy's Shares Are Rising

What’s Next For Macy’s?

Bullish traders are looking to see the stock continue to rise and stay above the moving averages as well as the higher low trendline. Bulls are in control of the stock and staying above these levels will confirm it.

Bears are looking to see the opposite; they would like to see the stock start to dip and fall below the moving averages. After falling below the moving averages, bulls would like to see the stock dip below the higher low trendline for a possible change in long term trend and the start of a downward trend.