J C Penney Company Inc (NYSE:JCP) reported a dismal set of earning post market hours yesterday. The company reported an unexpected fall in sales as consumers stayed away from spending amidst a volatile economic recovery and warmer weather which kept sales of seasonal merchandise down. Third quarter revenue fell to $2.7 billion as against street expectations of $2.82 billion.
The loss for the company shrank to $0.77 per share as against a loss of $1.94 reported in the same period last year which is being seen as a huge positive. According to analysts, the company has been able to cut costs and improve overall efficiencies.
The sales from same stores which have been in operation for at least a year came in below street estimates which are being seen as a huge negative for the stock. Analysts on the street believe that though the company is an exception turnaround story, the current quarter results have raised question marks over its sustainability.
When looking at the daily charts, the stock has been in a tremendous downtrend over the past year, falling by close to 15 percent YTD. The stock currently trades below all important daily moving averages which is a huge negative. The momentum indicators for the stock are trending in bearish territory indicative of the presence of strong selling pressure.
The relative strength index has given a buy signal but seems to encountering resistance at higher levels which is a bearish sign in the near term. The next level of resistance for the stock comes at $8.10 and support continues to remain near the $7 level. The stock for J C Penney Company Inc (NYSE:JCP) plummeted by close to 7 percent in pre market trading today, indicative of the fact that analysts and investors aren’t very happy about the results.