Macy's Run Overshoots Upside Projections, Will The Stock Run Higher?

has been one of the retail sector's – and the market's – top performers (at least in terms of consistent upside trajectory) for quite a while now. The big bet by institutions has been on the affluent consumer continuing to pump their cash into stores like Macy's, Nordstrom and Tiffany as well as the luxury car dealers. However, while Macy's has yet to show signs of weakness, some of their peers have shown some cracks in their technical foundation already.

Does Macy's simply run a better operation than these other chains?

Some cheap valuation metrics:

Good management effectiveness ratios:

Some troublesome balance sheet metrics:

Technicians note that Macy's stock is trading at and even above the upper edge of the long-term uptrend channel as the new week starts. The bears – who have already taken a beating in the stock – need Macy's shares to close out June below $69.25 (from $69.61 as of Friday's close) in order to have some hope in the short to intermediate-term. If they actually get their way, the stock may drift back down to the lower part of the uptrend channel near $54.

Macy's has been a winner among winners over the last six years. Even if a drop to the lower edge of the uptrend channel occurs, the stock would still likely have a bullish overall pattern. Such a drop (nearly 25%), though, would likely be too much pain for most traders to take. However, a monthly close above $69.25 would open the door to more upside as a new, higher uptrend channel would likely be established. It is somewhat hard to believe that investors are going to be willing to continue to pay these prices for a company that has a fairly heavy debt load – and for which the tailwinds of low interest rates could turn into the headwinds of rising rates at some point soon.