Target Corp. (TGT) was analyzed from a technical perspective in the middle of November, and I gave these thoughts -- "could TGT hold above $54 and make a comeback? Sure, it is possible, but the sharp decline Wednesday does not look like a "one-day event". My unscientific gut thinks TGT could decline further, to retest the $52-$50 area in the weeks ahead."
Looking back at my words and the charts this morning, I can see that my gut was wrong. That sharp decline in the middle of November had no follow-through selling. TGT rallied from $54 to over $78. Prices have corrected since the middle of January and tested the rising 50-day moving average line the other day. Now what?
In this daily bar chart of TGT, below, we can see that prices corrected $10 or so to the downside, but remain above the rising 50-day average line. The slower-to-react 200-day moving average line is rising.
The volume pattern is bullish, in that volume expanded in the early part of January as prices rose and declined in the latter part of January as prices retreated. The daily On-Balance-Volume (OBV) line has been rising since late June and shows another move up from November.
The trend-following Moving Average Convergence Divergence (MACD) oscillator crossed to the downside in January to a take-profits sell signal. This indicator has yet to narrow to suggest that the correction is over.
In this weekly bar chart of TGT, below, we can that prices are above the rising 40-week moving average line. The chart shows a fair amount of resistance above $75. This zone of resistance extends up to $85.
The weekly OBV line has mirrored the up and down moves in the chart the past three years. The weekly MACD oscillator moved above the zero line in November, giving us an outright go long signal. The two moving averages that make up this indicator have begun to narrow, so a turn could be coming.
In this Point and Figure chart of TGT, below, we can see a base in 2017 and an upside breakout at $64. A price target of $79 is shown.
Bottom line: TGT has rallied more than 50% from its June/July lows. A longer pause in the advance would be "normal" and welcomed. With resistance above the market in the $80-$85 area from 2015/16, it may take a while before TGT resumes its advance.