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Target Has a Breakout Level to Watch

Target has rallied hard over the past few months but investors are hesitating with earnings looming. Here's the breakout level to watch in TGT stock.

Investors are starting to focus on Target  (TGT) - Get Report, which is scheduled to report earnings before the stock market opens on Wednesday.

The company will report alongside Lowe’s  (LOW) - Get Report in the morning, giving us a mirror-like reflection from Tuesday as Walmart  (WMT) - Get Report and Home Depot  (HD) - Get Report reported earnings.

Will Target report similar results to Walmart, where the latter reported a top- and bottom-line beat along with a sizzling comparable-store sales result?

The bulls have been confident with Target, running shares up 12.5% so far this month and 38% from the March lows. However, the stock was down 0.75% on Tuesday and investors are hesitating a bit before the print. Let’s take a closer look at the charts.

Trading Target 

Daily chart of Target stock.

Daily chart of Target stock.

In early April, Target stock broke out over downtrend resistance (blue line) and mounted a steep rally back over $100.

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After some choppy action last month, shares broke out over $115 resistance in May and have been rallying since. Now things get a bit trickier ahead of earnings, although we have a pretty clear roadmap to navigate once the numbers are out.

On a bullish reaction, investors will undoubtedly be thinking about a breakout. Specifically, they will be watching the $128 area, which has been resistance, as well as the all-time high at $130.24.

Above this zone and Target stock can continue to run higher. Those searching for an upside target may consider the 123.6% extension of the 2020 range, up at $138.05.

On the downside, there are several levels to be aware of.

After filling the gap near $122.50, it would be promising to see Target find support between this mark and the 78.6% retracement at near $120.50.

However, if that area can’t be held, bulls still have a few levels to consider. The first being the $115 breakout zone and 20-day moving average at $115.50. That’s followed by the 200-day moving average just below $110.

Let’s wait for Target to report earnings and see what type of reaction we get. As is almost always the case, we’ll have to see how shares close on Wednesday to see if the respective move sticks.