JC Penney Struggling To Clear $9 Level: A Technical Look

Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

J C Penney Co Inc JCP shares were trading lower by $0.12 (1 percent) at $8.77 in Wednesday's session. Its first attempt to clear the $9.00 hurdle appears to be failing. After rallying from $8.47 to $8.89 in Tuesday's session, it sprinted to $9.18 shortly after the open before sharply reversing course.

Tuesday's move on much higher than average volume may be attributed to some short-covering ahead of Thursday's earnings report. The company has beat on EPS in its last five reports. The issue also has an extremely high short-interest (quantity of stock shares that have been old short, but not yet covered or closed out) of 33 percent.

The rally to $9.18 put the issue at its highest level since it put in a double top (term used to describe the rise of a stock, a decline, another rise to the same level as the original rise, and finally another drop) on October 7 ($9.56) and October 8 ($9.45).

Back in February 2007, J C Penney made its all-time high at $87.18 and declined all the way to $4.90 in February 2014 before mounting its arduous recovery.