U.S. stocks are rallying Thursday on hopes that trade talks progress peacefully. For Target (TGT) - Get Target Corporation Report , though, shares didn't participating in the broad rally for most of the day and lagged once it turned positive. Shares ended higher by just 19 basis points on the day, closing at $110.57.
That's a bid odd, particularly given how strong the retailer's shares have been over the past few months.
However, Target stock is down on news that its CMO Mark Tritton will become the CEO of Bed Bath & Beyond (BBBY) - Get Bed Bath & Beyond Inc. Report . The announcement is weighing on shares of the former, while sending shares of latter surging more than 25% on the day.
The action made BBBY Real Money'sStock of the Day.
In any regard, it got us wondering how shares of Target were looking. As it turns out, the charts still lean bullish as we head into the ever-important fourth quarter. Let's look.
Trading Target Stock
Target stock erupted higher in August after better-than-expected earnings, surging from ~$85 to $100+ in a single day. Jim Cramer even made Target one of his anointed retail names in his WATCH acronym. The others include Walmart (WMT) - Get Walmart Inc. Report , Amazon (AMZN) - Get Amazon.com, Inc. Report , Costco (COST) - Get Costco Wholesale Corporation Report and Home Depot (HD) - Get Home Depot, Inc. Report .
To say Target is doing well is an understatement -- and its stock reflects that reality.
Shares continue to test $110 resistance and each time, the stock is ultimately rejected. While TGT stock did hit new 52-week highs on Wednesday, it failed to close with the same bullish momentum that took it higher.
After the Tritton announcement, shares are hovering just under resistance. I'm looking for a close over $110 that triggers a breakout and sends TGT stock higher.
On the downside, shares remain above the 20-day moving average, as well as former short-term resistance (blue line). Target stock has been trading sideways for about two months, allowing it to consolidate those massive post-earnings gains. That's evident as the relative strength index has gone from very overbought to relatively neutral (blue box at the top of the chart).
Further, the momentum-measuring MACD reading at the bottom of the chart (blue circle) suggests momentum could be swinging back in bulls' favor.
Put it all together and I'm looking for a clean breakout over $110. It doesn't mean we'll get it, but at least by waiting for confirmation, we'll reduce the risk of being long on a deeper-than-expected pullback.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.