Target’s Stock Defies Gravity When the Market Plunges: Just-in-Time Buying or FOMO? | Don’t ignore this chart!

On Tuesday, Target Corp (TGT) was one of only nine stocks to buck the market sell-off, rising 13% on Runaway Gap. The Dow Jones index fell -404 points, the S&P 500 index fell more than 1% and the Nasdaq index fell 1.56%.

Chart 1: Strong volume upscan from Tuesday 3.05.24. TGT emerged as a result of a Strong Volume Gainer scan from the StockCharts scan engine. Target Corp also recorded a SCTR score of 91.2, indicating strong technical strength.

The next day, Target closed the gap again. So what is driving the bullishness?

Target’s holiday quarter earnings and revenue beat Wall Street expectations Tuesday. Optimistic investors jumped in, causing the price to surge (and gap) twice, even as the company announced a more gloomy sales outlook for 2024. But before we dive into the technical details of TGT, some traders may ask:

• Was it prudent to follow a bullish trend after earnings? Ultimately, some analysts believe the Wall Street consensus has set a low bar for expectations. What happens in this case?
• If you’re bullish on TGT, keeping in mind the company’s soft 2024 forecast and assuming the stock will eventually decline, when would be a good time to enter a long position?

Chart 2: Weekly Goals Chart (TGT). TGT found resistance at the upper end of a trading range that has been tested three times from 2022 to 2023.

The target share is far from the all-time high for 2021. Although the stock hit a 52-week high today, that high coincided with strong critical resistance (see blue dotted line) and an immediate decline.

TGT must break above this level for its current upward trend to continue. That could certainly happen, but how likely is it that it will happen anytime soon?

Chart 3: Daily Goals Chart (TGT). There is a strong difference between price and buying pressure.

The second candle from last session shows the 13% surge (and gap) that occurred after earnings. According to technical analyst Thomas Bulkowski, runaway gaps have only an 8% chance of being filled within the week the gap occurs, which is very optimistic.

However, the second gap, which shows strong rejection compared to the resistance level seen in the previous chart, is looking more and more like an exhaustion gap, which has a 60% chance of being filled within a week. Also, look for volume shortfalls that are causing the gap (see red vertical dotted line).

Take a look at the Money Flow Index (MFI).is a type of volume-weighted RSI that shows a steady difference from TGT’s three-month surge, indicating that buying pressure is actually waning. This thesis becomes even clearer when we look at the following. Chaykin Money Flow (CMF) With MFI.

Watch out for these two things

Drawing a Fibonacci retracement would be somewhat premature as the peak has not yet been identified. However, assuming that is the case, the 50% Fib retracement line will coincide with price-specific volume. The indicator’s second largest bar is in the range around $140.

Technically, if TGT comes out on top here, that range could be a lucrative entry point. In that case, you can set a price alert at $150 to call attention to the potential setup. But on a fundamental level, you might want to wait for a clear sign that TGT has overcome its recent decline. customer traffic Traffic is key to TGT’s revenue, especially considering forecasts for weak quarters ahead.

To elaborate, as shown below, July and August are the strongest months for retailers compared to the overall market (at least from a 10-year seasonality perspective).

Chart 4: 10-year seasonal chart of TGT performance versus the S&P 500. The highest returns compared to the S&P 500 occurred in July (2.4%) and August (3.3%).

How to set up price alerts

Setting technical alerts at these support and resistance levels will help you compare potential entry points with market developments that may influence your decisions.

To access the Technical Alert Workbench, follow these steps:

• Log in to your StockCharts account.
• click Your dashboard.
• Click Next. warning button or new button your notifications panel.
• In the Alerts workbench, select the type of alert you want to create. Alert type Button in the upper left corner.
• To create a price alert price alert As warning type.
• Add symbols to the symbol box, set price triggers, and choose how you want to be notified.
• Click Next. Save Alert button.