On May 21st before the market opened, The TJX Companies (TJX) reported earnings for the first quarter of its fiscal year 2020. Shares rebounded hard in 2019 after a dramatic two month drop in November and December of 2018. Bottoming out at $41.49, TJX neared its 52-week high of just over $56 in late April. However, since then trading has given off two bearish technical signals crossing below its 20-day and 50-day simple moving average and is close to giving off another, as TJX threatens to cross below its 200-day average. The technicals are difficult at the moment, but TJX may have the fundamental strength to stage a rally.

After a subpar end to fiscal year 2020, this quarter’s report provided some optimism for investors looking at TJX. Both EPS and revenue were higher than Wall Street expectations. Year-over-year growth was 6.78 percent this quarter which was a positive improvement from the 1.52 percent growth in FY 2019 Q4. However, both were significantly slower than the 2018 calendar year growth rates which averaged 12.80 percent. The key to deciding if TJX has a bullish case is whether or not the weak FY 2019 Q4 was a temporary derailment or a sign of continued weakness.

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