I harp from time to time about how the bottom of a chart isn’t “support”, and I used the recent example of Aeropostale to show this (although, as I’ve drawn with the red line, I think it’s ground down to a decent support zone at the moment, which should give it some time to breath before it takes its next tumble):
A more opportune example of this is JC Penney which has lost about 90% of its value since it peaked in 2007. In spite of being down this much, I think there’s plenty room left to the downside, particularly considering the hearty bounce we saw recently. I am short JCP at 8.73, and my expectation is that we will challenge those lows we saw early this year. (As a side note, I would be really interested to know what kind of direction the photographer was provided when he took that picture below………”look diverse!” perhaps?):
