Walmart (WMT) , Target (TGT) , Home Depot (HD) and Lowe's (LOW) report June quarter earnings this week. We looked at WMT on Aug. 13, so let's check out the charts of TGT.
In this daily bar chart of TGT, below, we can see that prices have climbed steadily higher from early March. TGT is strong above the rising 50- and 200-day moving average lines. The On-Balance-Volume (OBV) line has been in an uptrend the past year but levels off in early July, creating a small bearish divergence when compared to the price action. The Moving Average Convergence Divergence (MACD) oscillator turned lower in July and is in a take profit sell mode.
In this weekly Japanese candlestick chart of TGT, below, we can see a strong rise over the past three years. The candles show some balance in the battle between bulls and bears - a doji or a spinning top pattern. Last week's upper shadow tells us that traders rejected the highs. Prices are trading above the rising 40-week moving average line but are not extended nor overbought. The weekly OBV line is bullish and the MACD oscillator is pointed upward with only some recent narrowing.
In this daily Point and Figure chart of TGT, below, we can see a potential upside price target in the $296 area.
In this weekly Point and Figure chart of TGT, below, we see that the software is projecting the $296 area as a price target -- the same as the daily chart above.
Bottom line strategy: We reviewed the charts of TGT on May 20 and wrote, "Continue to hold longs from previous recommendations. Raise sell stops to $201 from $195. The $296 area is our new price target." I have no special knowledge of what TGT will report for numbers this week. Traders who are long TGT should now raise stops to $245 from $201. If prices decline below the 50-day moving average line I want to step aside. Prices have risen almost three-fold from their $90 base pattern three years ago.
