Macy's Stock Flies Out Of A Pattern: Here's Why

Macy’s Inc M shares are trading higher following reports suggesting Saks Fifth Avenue's e-commerce unit has begun preparations for an IPO at a $6 billion valuation. Macy's stock was trending on social media sites today such as StockTwits.

Macy’s was up 17.51% at $28.25 at market close Monday.

Macy’s Daily Chart Analysis

• Shares have broken out of what technical traders call an ascending triangle pattern. The stock was able to test old resistance as support and has been flying higher since.
• The higher low trendline may continue to hold as support in the future for the stock. The $20 level was acting as an area of resistance before the stock broke above the area. The level may now hold as an area of support.
• 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 pushing higher the past few days and now sits at 75. This increase in buying pressure put the stock into the overbought range, where the stock is seeing many more buyers than sellers.

See Related: Why Macy's Shares Are Rising

What’s Next For Macy’s?

Bulls would like to see the stock continue to climb and hold above the higher low trendline. Bulls are in control of the stock and as long as it can stay above the higher low trendline, bulls will continue to hold control of the stock.

Bears are looking to see the stock start fading lower and drop below both the higher low trendline as well as the $20 resistance level. This could show the stock is losing steam and could be ready for a change of trend.

Photo: Courtesy Macy's