With the albatross of a credit card security breach still
hanging around its neck, it is no wonder that retail giant
is out of favor on Wall Street.
#-ad_banner-#In just the past week we've seen Cowen &
Co.'s Consumer Tracking Survey report "meaningful decreases" in
customer satisfaction. And Standard & Poor's lowered the
company's credit rating a notch to A.
But the charts tell a different story, and it is a good
We can attribute the February rally, following weak
fourth-quarter results, to excessive pessimism. The news was bad,
but not as bad as expected, and shares soared. And now after a
four-week slide, it looks as if TGT is ready to break out again.
(My colleague Marshall Hargrave
made a similar call in January
The February rally pushed the stock above the 50-day moving
average for the first time since the data breach was reported in
December. And the March pullback found support back at the moving
average in what chart watchers call a successful test of the
initial breakout. Johnny-come-lately bulls had a second chance to
buy -- and they took it.
On-balance volume, which keeps track of the net volume traded
on up days and down days, has been rising since February. This is
another positive change since the data breach, although this
indicator declined for much of last year. But money is flowing
back in, so we'll take it.
Basically, we have a stock that was given up for dead making a
surprise jump on what should have been bad news. It then took
several weeks off to allow enthusiasm to fade once again, and now
is knocking on the door of another upside technical breakout and
bullish reversal of trend.
Indeed, TGT poked above the trendline Thursday, prompting some
traders to buy. However, a close of $61.25 or higher would be the
official signal for most traders. And if successful, the first
upside target would be resistance set by the bottom of last
year's March-June trading range, the August gap down, and the
November high in the $67.50 area.
Action to Take -->
-- Buy TGT at $61.25 or above
-- Set stop-loss at $58
-- Set initial price target at $67.50 for a potential 10% gain in
This article was originally published at
Maligned Retailer Poised to Make a
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