Watch These Levels as Target Disappoints, Shares Slump
Let's see how prices may behave from here.
You've reached your free article limit
You've read 0 of 1 free Pro articles.
Retailer Target Corp TGT reported a miss Wednesday morning for estimates of Q1 results and they guided their outlook below consensus views. The stock price is sharply lower in early trading.
Let's check out the charts and indicators to see how prices may behave from here.
In this daily bar chart of TGT, below, I can see that prices have been weak since early April. TGT has been trading below the declining 50-day moving average line and could soon test the rising 200-day moving average line. The trading volume has been steady over the last seven weeks as prices declined. A decline in light volume would have been a more positive signal but that was not the case for TGT.
The On-Balance-Volume (OBV) line shows a decline since early March as traders changed from being aggressive buyers of shares to aggressive sellers. The Moving Average Convergence Divergence (MACD) oscillator is in the sell zone below the zero line.
In this weekly Japanese candlestick chart of TGT, below, we have to imagine how prices will perform as this chart will not update until Friday. Prices have been trading lower with a series of red (bearish) candles. A test of the rising 40-week moving average line is likely in the days ahead.
The weekly OBV line has been pointed lower for several weeks now. The MACD oscillator has crossed to the downside for a take profit sell signal. Some chart support may develop in the $135 area but wait for it.
In this daily Point and Figure chart of TGT, below, I can see a downside price target in the $131 area. This price target may get updated later today.
In this weekly Point and Figure chart of TGT, below, I can see the same downside price target as the daily chart above: $131.
Bottom line strategy: Shares of TGT will open Wednesday with a gap lower. Some short-term traders may decide to buy it for a bounce, but that is not my style of trading. Investors who may see promise in the long-term fundamentals of TGT should wait for a fresh bottom to develop.
Employees of TheStreet are prohibited from trading individual securities.