Target TGT Suddenly Targets the Prior Low

May 18, 2016: 1:22 PM CST

Before you could say “Clean-up on Aisle 7,” Target (TGT) shares slipped to the prior swing low.

Traders now have a “Make or Break” opportunity to play a departure from this critical support … target.

Let’s see how it developed and where we trade from here:

Even though Target (TGT) beat the Wall Street estimates on earnings today, revenue weaker.

Reasons aside, price gapped down from an ongoing sell-swing from $83.00 to the prior low of $66.00.

Price support-bounced initially after the morning gap-down but stagnated between $70.00 and $66.00.

For an educational lesson, note the negative divergences (red arrows) that undercut the April high.

Here’s the bigger picture for Target (TGT) shares with a possible aggressive opportunity:

Priced traded up toward $84.00 in 2015 and then down to $68.00 at the beginning of 2016.

Already, Target shares completed the same rally-and-collapse pattern in 2016.

Note the series of weekly reversal candles into the underside of $84.00 per share.

Similarly, we’re noting bullish shadows or possible reversal candles off the $68.00 pivot.

Shares collapsed to the confluence of the following:

  • Weekly Lower Bollinger Band
  • Rising 200 week Simple Moving Average (red)
  • 61.8% Fibonacci Retracement as drawn

So far, we’re seeing a rally here.

If you’re bullish on Target and like playing aggressive support-bounce reversals, this is a spot to try it.

Otherwise if shares fall lower and crack under $64.00 per share, it would suggest a possible larger reversal and open a sell pathway lower.

Either way, set your trading plans based on what happens here and the departure away from the $64.0 and $66.00 key pivot or … target… levels.

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Corey Rosenbloom, CMT

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  1. Target Shares Swing Low - Says:

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