Target has been struggling over the last 2 years in terms of its stock price. If we really look and evaluate the company in the retail space, they’ve had some struggles after COVID and all the things that have been going on. There have been some issues with underlying on that stock, and looking at the chart here, I want to show you the last two years this stock has been trending to the downside.
Recent Positive Movement
Now in today’s action, we are actually up about 18%, so that’s fantastic and phenomenal for the company. If we go in and just look at some of the movements going on within Walmart, Amazon, Costco, and Target, you can see Target is doing quite well. This is because we’ve just recently had these earnings. However, the earnings on their own weren’t really anything amazing or crazy. The estimated was 1.476, but the actual was 2.1, so it was a beat, but it wasn’t a blowout. They still have some concerns coming up in the future.
Critical Examination of Earnings
If we’re looking at some of the news reports, it even made the Yahoo Finance homepage. It surges after clobbering muted estimates. So yeah, it did well, but what you normally want to see is time and time again quarter after quarter for it to continue to win. The retail space makes a lot of its money and income between the Thanksgiving and Christmas time frame in this fourth quarter.
Stock Price Analysis
So as we start looking at the stock price over the last 5 years, this stock has been going down over these last two years. If you check out some of these articles, you’ll notice a lot of the other little details. To me, what matters is more along the lines of the actual stock movement and behavior. I usually want to see follow-through coming in after this date because if you have something like this that pops over a course of a multi-year movement and you have this big pop, what you’ll want to know is can we sustain it?
Potential Pitfalls – Filling the Gap
Or are we going to come in and fill this Gap? Now you’ve got this big movement of almost 177% higher, and if you start selling back off to fill this Gap, that could be a big issue. I think to some degree some of this was short sellers caught on the wrong side looking to say, “Okay, well now we have to get out of the position.” So it also drove the stock price a little higher because the stock was trending down for quite a while. It could be something like the JC Penney model or the Dillard or even the Sears where, “Is it really turning over?” Because Target used to be, in the eyes of the consumer, quite big, way above Walmart. In fact, some people always used to call it “tar.”
Chart Analysis and Cautious Optimism
When we look at the stock price here, we’ve had a nice sideways consolidation pattern, and we got a nice breakout. The big question is, will we come back on this $18? I don’t know; time will tell. It’s still just the first day, but it is doing fantastic, and the movement is quite good. What we want to see is follow-through. Now you have to back up and look at the longer term on this company and see if this is now creating a bottoming effect around this $100 price level.
Considering Psychological Round Numbers
The $100 is an interesting point as well because you also have that psychological round number concept behind it. Because now when you go into the $100, there are a lot of people that are willing to pick up that stock at that $100 level. Looking at the resistance, you’re still kind of in that resistance zone on that descending trend line. So I’d still be careful, and that is on the longer term.
Patient Strategy and Future Watch
I wouldn’t jump in or hop into it too quickly, but instead kind of wait for it to break through. If you are a little more aggressive, you could get in it earlier; you could do that. But remember, it’s something that we want to be careful of is that Gap because that Gap could be a little bit of an issue. Be patient, wait, have a plan in mind, and be mindful. Today it’s good news, it’s a celebration for Target, but we’ll see what happens over the next 3 to 5 days. That will tell you if more buyers are coming in, if we’re digesting the move, or if we’re pulling back to fill the Gap. After that, you might want to start doing something with it if it matches your criteria. Hope that helps, gives you a little insight. Truly appreciate all the fellowship and the comments that you guys write in. It’s always very nice of you, and thanks for joining me. I’ll see you maybe in the next video. Take care.
