Target (TGT) has broken out on the upside. Two weeks ago we saw that as a strong possibility. We wrote that, "TGT has strengthened recently and could break out over $78 but it may not happen right away. Some sideways movement in the very short term would be anticipated and that could be used by traders to do some buying. A breakout over $78.26 could open the way for an advance to the low $90's." Let's review the charts again for a more refined strategy.
In this daily bar chart of TGT, below, we can see that TGT gapped down in May but quickly reversed back to the upside. More forward-looking investors probably used the downside dip to do more buying as prices quickly surged to a new high. TGT is above the rising 50-day moving average line as the bullish 200-day line. The daily On-Balance-Volume (OBV) line has moved sideways for five months but it is very close to making a new high for the move up. A new high on the OBV line would confirm the new price highs. The Moving Average Convergence Divergence (MACD) oscillator has just turned up to a fresh outright go long signal.
In this weekly bar chart of TGT, below, we have some bullish signals and we look like we will get more soon. Prices are above the rising 40-week moving average line. The weekly OBV line weakened the past five months but looks to be reversing to the upside. The weekly MACD oscillator is poised to make an upside crossover to a fresh outright go long signal.
In this Point and Figure chart of TGT, below, the upside breakout is clear with the trade at $78.26. A $95.97 price target is being projected.
Bottom line: TGT is breaking out on the upside from a five-month consolidation pattern from $68 to $78. The first upside price target is $88 and that comes from taking the height of the pattern and projecting it upwards from the breakout point. The second target is the Point and Figure target of around $96. A close back below $72 is likely to seriously undermine the bullish breakout.
