On Wednesday, February 22, investors will be paying close attention to the earnings report from TJX Companies Inc., the parent company of popular retailers such as TJ Maxx, Marshalls, and HomeGoods. Analysts are forecasting earnings of $1.21 per share, which would represent a slight increase from the same period last year.
However, recent market trends indicate that TJX's stock may be headed for a rough patch. On February 16, the stock moved below its 50-day moving average, which is often used as a key indicator of a stock's short-term trend. This move below the 50-day moving average signals a change from an upward trend to a downward trend.
In fact, according to historical data from the past 54 instances when TJX moved below its 50-day moving average, the stock price decreased further within the following month in 39 of those instances. This means that the odds of a continued downward trend are estimated to be around 72%.
However, the stock price can drop more in the near future if TJX's earnings report and guidance fall short of expectations. When determining whether to purchase, sell, or retain their investments in TJX, investors must carefully consider the potential risks and benefits.