Skip to main content

Target Earnings Preview: The Must-Know Chart Levels

Target is set to report earnings on Wednesday. Target recently hit new all-time highs. What do the charts look like ahead of the print?

We’re getting to that part of earnings season when the retailers are reporting. Target  (TGT) - Get Target Corporation Report will be reporting on Wednesday, alongside Lowe’s  (LOW) - Get Lowe's Companies Inc. Report and TJX Cos.  (TJX) - Get TJX Companies Inc. (The) Report.

On Tuesday, we heard from Walmart  (WMT) - Get Walmart Inc. Report and Home Depot  (HD) - Get Home Depot Inc. (The) Report

Despite robust results and after Home Depot traded higher in the premarket session, shares are now down slightly on the day.

For its part, Walmart crushed its expectations too, although it’s up just 2% and near its session low.

Analysts like Target heading into earnings. While the results will probably be just fine - even great - will the stock reward shareholders for the quarter? That’s not a guarantee.

Let’s look at the chart.

Walmart is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells WMT? Learn more now.

Scroll to Continue

TheStreet Recommends

Trading Target

Daily chart of Target stock.

Daily chart of Target stock.

Growth stocks have been in a brutal bear market. E-commerce, social media, cloud, software and other stocks have been swept up in the pain.

What does this have to do with Target? Thanks to its large e-commerce exposure, it too felt some of that selling pressure. However, after bottoming in early March like the rest of the growth stocks, Target went on to make new highs - not new lows.

Since hitting a high earlier this month, Target has struggled for more traction. Currently, shares are below the 10-day and 21-day moving averages, although earnings are likely to either reverse this observation or make it much worse.

On the downside, I’m watching the $202 to $205 zone first. That’s where Target stock finds it 10-week moving average and current support.

If that’s not adequate support, the $195 to $200 zone should be. This was a breakout area in April. It’s also where the 50-day and 21-week moving averages currently rest.

Given the high-quality nature of Target and the muted-to-higher response we’re seeing from retail on Tuesday morning, I would expect the dip in Target stock to be relatively shallow.

If we get an upside reaction, I want to see Target reclaim its 10-day and 21-day moving averages and preferably, take out this week’s high near $213.60. Above that puts the all-time high in play near $217.40, followed by the 161.8% extension near $220.