NEW YORK (The Street) - Retail giant Target (TGT) was on a strong momentum run-up that ended abruptly on April 13. The stock failed to hold its 50-day simple moving average last Wednesday then had a downside price gap on Thursday and ended the week with a technically negative weekly chart.
This technical setup chart suggests that investors should reduce holdings on strength following the release of the company's quarterly results scheduled before the opening bell on Wednesday.
Analysts expect Target to earn $1.03 a share and the retailer reported better than expected reports the past two quarters. Earlier in the year Target told food products providers that they were shifting to fresh and more healthy foods in their supermarket isles.
Target is a component of the Standard & Poor's 500 Index which is up 3.4% year to date setting an all-time intraday high of 2131.78 on Monday. Target is lagging slightly, up 3.2%, but the stock is 6.7% below its all-time intraday high of $83.98 set on April 13.
Let's look at the daily and weekly charts for Target and provide the key technical levels at which to buy on weakness and the key technical levels at which to sell on strength.
Investors not familiar with technical analysis should begin with the notion that a price chart for a stock shows a road map of past price performance, which provides guidance for predicting future share price direction.