June 25, 2009 (FinancialWire) (By Frank Kollar) — Shares of JC Penny Inc (NYSE: JCP) gained over 138% from their bear market lows to their May 6 highs. But since those highs, JC Penny has been correcting.

If you draw a line connecting the daily highs on May 6 and June 2, and also draw a line connecting the daily lows at May 26 and June 22, you will create a pennant shape. The upper line is the declining trend resistance line and the lower is the rising trend support line.

Typically, when pennant patterns form after a substantial advance, they break to the upside and the advance continues.

A few days ago we wrote that if the lows at $24.56 hold, JC Penny could be headed back for a run to its prior rally highs.

It appears that they have. Look for higher highs and a test of the upper declining trend resistance line in coming days.

The Fibtimer.com (http://www.fibtimer.com) Stock Timing Strategy holds a position in JC Penny.

Frank Kollar has been timing the financial markets since 1982, with online service since 1996. He is a dedicated trend timer and his strategies exited the markets before the crash in 1987 as well as the bear market in 2000 through 2002. During the 2000-2002 bear market, his bearish positions resulted in gains exceeding 100 percent, all achieved by trading trends.

Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.

Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.

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