J.C. Penney Company, Inc. (NYSE:JCP) is getting smoked today. The stock is trading at $14.21, -1.66 (-10.46%) after hitting a new 52 week low at $13.90 earlier. This massive decline is coming on the back of the company getting rid of CEO Ron Johnson. While this was initially cheered, the replacement caused fresh horror. The new CEO of J.C. Penney is Myron Ullman. He was the CEO prior to Ron Johnson.
The reason for the selling is lack of fresh blood. This company which is not far from possible bankruptcy is going back to the old school which is partly what got the company in this mess to begin with. The selling is heavy.
Why is JCP a buy?
The stock is nearing its 2009 low of $13.71. This is a technical double bottom and major support level. In addition, volume today will reach a record high. It is already over 55 million at lunch time. This spells possible capitulation, or a final flush out prior to a longer term bottom. Lastly, anytime analysts are overly bearish on a market or stock, the bottom is usually in and reversal is near. This is now the case on JCP.
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Chief Market Strategist