Chart of the Week: Target
We’re going to be focusing on big retailer Target, symbol TGT. Let’s take a look at this one.
If you’ve been following this name for any particular amount of time, you know that the stock has just been hammered over and over and over again. Every single quarter, the stock reports poor earnings, and the stock just gets hammered and drilled. And more recently, it hit the bottom of the barrel probably at the beginning of October. We can see that at about the $103-104 level.
But it went sideways for a bit, and you can see that sideways motion for about six weeks here put in a nice little base on Target. When they reported earnings last month, the stock popped the day before. And then the day after earnings, it really took off here.
But what’s really impressive to see is how the stock has held that gap up and that range that it had on earnings day and continues to make some higher highs and higher lows.
Clearly we see that the stock has hit some resistance at the 200 day moving average. That is going to present some problems trying to get through. And of course, that lines up with a little bit of resistance from this area from back in June. We like the fact that the stock is making higher highs and higher lows.
It is blue candles on the go-no-go chart, which is strongly bullish.
We do see the MACD which pushed out hard following that big move up. It’s starting to flatten out a little bit. It simply means that the stock is probably pretty tired after the big strong move over here.
We do have earnings coming up in February. And of course the holiday shopping season is in middle gear right now. We’re still going strong for the next three weeks. And Target is usually a pretty big beneficiary of gift card redemptions, which comes out in January and February of the new year.
Indicators are looking bullish
Let’s take a look at the other indicators as well.
The Chaikin money flow has been very very strong. And again, this is a signal that the big institutions jumped into the name last month and they’re not selling it. You can see Chaikin money flow is still resting up here at a higher level.
The TDI at the bottom here means relative strength is doing well as it relates to where bollinger bands are placed on the chart.
And then finally the parabolic SAR, which is the dots right over here on the top pane of the chart, are still reflecting bullish as well.
We do have an impending bullish crossover here with this 50 day moving average crossing over the 100 day. Where the 200 day moving average is, of course, the resistance. But we vaulted above that 100 day moving average on earnings day and we stayed above there. The 50 day moving average is about to cross above that. That would be a positive development for Target.
Where do we think this is gonna go?
I think that this has got a chance to get to those old May highs, let’s call it about $162, over the next two and a half, three months. They put some good numbers together. The margins increasing, operating leverage increases as well. All of these are fundamentals not related to the chart, but the chart is telling us that there’s certainly some more upside to go with Target.
The chart is telling us that there is certainly more upside to go with Target. I have some calls out to January, February, March. So hopefully we get some good movement on that over the holidays.
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