Two weeks ago I told members to buy Macy’s (NYSE:M) calls because of a bullish bottoming tail and reversal signal. The stock was trading under $20 at the time. After a surge to almost $22, we sold our calls for over a 60% profit. I sold because Macy's had pushed into a major trend line of resistance and I figured it would pull back. Taking profits was the smart thing to do. That's exactly what has happened. Shares of Macy's have consolidated slowly for the last week, inching down slightly.
Next Move Up
At this point, Macy's has formed a bull flag pattern. The next move up will likely take out the resistance trend line seen in the chart below, blasting the stock sharply higher. I'm looking to buy some calls again, expecting the stock to move as high as $24 in the coming week or two.
