Target Corp. (TGT) is the Stock of the Day at Real Money after the retailer released its fourth-quarter results here on Tuesday morning and reported that its comparable-store sales rose 1.5%, which was shy of the consensus expectation for an increasee of 2.1%. Let's check out the latest charts and indicators for Target.
In this daily bar chart of TGT, below, we can see that prices have made a potential topping pattern since September. Connecting the lows from early October to early February creates an upward sloping trendline. In January prices gapped down below the cresting 50-day moving average line. On Friday prices tested the rising 200-day moving average line. The broad market rally Monday lifted prices above the 200-day line, but we could see further testing and maybe a break of the line in the days ahead.
The daily On-Balance-Volume (OBV) line has been weakening since late December and tells us that sellers of TGT have been more aggressive in the past two months. The Moving Average Convergence Divergence (MACD) oscillator has been bearish since the middle of January.
In this weekly bar chart of TGT, below, we can see signs of weakness. Prices are testing the rising 40-week moving average line. Notice also that prices have made a number of pullbacks and corrections since the middle of 2018. The weekly OBV line shows a rise to the middle of December and the subsequent decline suggests we should anticipate more selling ahead. The MACD oscillator on this longer time frame crossed to the downside at the beginning of the year and is making its way down to the zero line.
In this first Point and Figure chart of TGT, below, we used daily price data and can see that the software has projected a significant downside price target in the $84 area.
In this second Point and Figure chart of TGT, below, we used weekly price data and here the software is projecting a possible downside price target in the $90 area.
Bottom line strategy: I do not know how the public is going to react to the spread of the coronavirus. Will they continue to shop in retail outlets? Will they only shop online? Who knows, but right now the charts of TGT are on the weak side with potential downside price targets. I would recommend protecting long positions and defer new positions.
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