Conclusion, Investment Implications, Strategy

The TJX Companies, Inc (TJX) is amid favorable conditions to resume its November 2020 Strategic advance from major underlying support near $64.29, which is currently being tested.  A sustained rise above this area would target an additional 14% rise to $74.65 per share.  This is an Asbury Value trade idea.

Analysis and Rationale

The TJX Companies, Inc (TJX), together with its subsidiaries, operates as an off-price apparel and home fashions retailer. It operates through four segments: Marmaxx, HomeGoods, TJX Canada, and TJX International. The company sells family apparel, including footwear and accessories; home fashions, such as home basics, furniture, rugs, lighting products, giftware, soft home products, decorative accessories, tabletop, and cookware, as well as expanded pet, kids, and gourmet food departments; fine jewelry and accessories; and other merchandise. As of March 30, 2021, it operated 1,271 T.J. Maxx, 1,131 Marshalls, 821 HomeGoods, 48 Sierra, and 34 Homesense stores, as well as tjmaxx.com, marshalls.com, and sierra.com in the United States; 280 Winners, 143 HomeSense, and 102 Marshalls stores in Canada; 602 T.K. Maxx and 78 Homesense stores, as well as tkmaxx.com in Europe; and 62 T.K. Maxx stores in Australia. The company was founded in 1956 and is headquartered in Framingham, Massachusetts.

The rightmost green highlights in Chart 1 below show that TJX is currently testing its 200-day moving average, a widely-watched major trend proxy currently at $64.28 while rebounding from monthly (our Tactical time period) oversold extremes.  The other green highlights show that a similar environment closely coincided with Tactical bottoms in late January and in early March.  These conditions set up a low-risk buying opportunity to buy an uptrending stock in a potentially low-risk/high reward environment, just above major support.  If the current major uptrend in TJX is still valid, this is where it should resume.

Chart 1

A sustained rise above the $64.28 area would indicate this is indeed the case and would target an additional 14% rise to $74.65 per share. 

Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $63.25 area, a long entry price of $65.35 would provide a 1:4.4 risk/reward ratio (risking $1.00 to make $4.40) with an initial risk of 3.2%.

Table 1

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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.