Shares of Target (TGT) - Get Target Corporation Report are down almost just slightly in midday Monday trading, currently changing hands near $81.20. While shares are lower, they're drastically outperforming the SPDR S&P 500 ETF (SPY) - Get SPDR S&P 500 ETF Trust Report on the day, which is currently down more than 2%.
Helping stem the losses? An upgrade from the analysts at Deutsche Bank.
They upgraded shares from hold to buy and assigned a $99 price target. From Monday's current level, it represents more than 23% upside. What do the charts have to say about such a rally, though? Let's look.
Trading Target Stock
Target stock is an attractive holding for investors. For one, it's got a solid dividend, currently paying out a 3.2% yield. Second, Target trades at a reasonable valuation, at less than 14 times earnings. With positive earnings and revenue growth forecasts for both this year and next year, and solid momentum in its business now as indicated by its comp-store sales growth, it's one of the few retailers that can keep pace despite Amazon (AMZN) - Get Amazon.com, Inc. Report .
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On the charts, the $82 level has proven notable for Target. Below this mark now, some more downside levels may be tested before getting a healthy bounce. The 38.2% and 50% retracements for the one-year range come into play at $78.84 and $75.27, respectively.
Sandwiched in between is the 200-day moving average near $77. Aggressive dip-buyers may want to buy at the 38.2%. Conservative buyers may wait for a decline down to the 50% retracement. Those who split the difference can use the 200-day moving average as a reasonable level to initiate a position.
Should the selling really accelerate, a dip down into the $70 to $72 zone would be another reasonable spot to buy the dip in Target stock.
With the 61.8% retracement at $71.70 and this zone marking the May lows, it's reasonable to suspect Target finds support in this area. Below it opens up TGT stock to its 2019 lows near $64, however.
The stock is about 10% off its highs near current levels. Should it begin to bounce as a result before testing some of its more significant support zones, look for Target stock to reclaim the $82 level. Above it could ignite a bounce up to the 20-day and 50-day moving averages.
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This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.