TJX: Brick and Mortar Merchant Hits Resistance

It’s no secret that social distancing is bad for retailers. But one name in the space has held up better than most and may now be at risk of a move lower: TJX.

TJX, the parent of Marshall’s and TJX Maxx, had a strong bounce between mid-March and April 9. But since then it’s run into a wall of selling at $50. That’s the same level where it bottomed last May and August. Old support is new resistance. Not bullish.

The entire rally of late may now be turning into a bear flag that’s at risk of breaking.

Momentum is also showing signs of weakness as MACD nears a bearish cross and the 8-day exponential moving average turns lower.

It could also make sense fundamentally because TJX relies heavily on physical stores rather than e-commerce. The word “digital” didn’t appear anywhere in its last earnings report.
However, management did say “Customer traffic was the primary driver of the comp store sales increase.” That was great in the pre-Covid world, but what about now?

Earnings are estimated for May 18.