Target Beats on Earnings, but the Shares of the Peaks anyway

Big box retailer Target Corporation (TGT), which has beaten the earnings estimates on May 20, the extension of a winning streak for five consecutive quarters. The stock is on a strong momentum run-up that peaked at $125.97 as of May 19. This indicates that the good results of the news has been priced in the Target of the rally. The stock ended last week below this week’s risky level is $120.09.

Target stock closed last week at $117.49, down 8.4% year to date and 9.8% below its intraday high of $130.24 together on Dec. 20. The stock is also in the bull market territory, 30.3% above its April 3 low of $90.17. The target is high P/E ratio of 21.52, and a dividend yield of 2.22%, according to the trends.

The daily chart for Target

Refinitiv XENITH

Target Stock had been above a cross of gold since May 8, 2019. A golden cross occurs when the 50-day simple moving average rises above the 200-day simple moving average, indicating that the increase in prices to come. This follow-up of the stock to its intraday high of $130.24 together on Dec. 20.

Note that the stock gapped higher in August. 21 and Nov. 20, 2019, on the positive reactions to earnings. Once the high has been defined, the stock has started to cascade lower. The target fell below 50 days simple moving average on Jan. 15. The stock has held its annual value level of $111.21 on Jan. 31, has rebounded to $118.88 on Feb. 21, then fell below $111.21 3 March.

The 200-day simple moving average has been a magnet between Feb. 21 and May 4. Between the two, Target stock tested its semi-annual value level at $92.91 as a buying opportunity between 12 March and 6 April. Between 17 April and 7 May, the annual, quarterly, and monthly pivots at $111.21, $112.43, and $113.68 were magnets. After the stock peaked at $125.97 as of May 19, it has ended the week below the pivot weekly $120.09.

The weekly chart for Target

Refinitiv XENITH

The weekly chart of the Target is positive, with above its five-week modified moving average of $112.03. The stock is also above its 200-week simple moving average, or “mean reversion”, to $78.86.

The 12 x 3 x 3 weekly slow stochastic reading is finished the last week, an increase of 72.28, of 65.16 May 15. At the top of December, this reading has been above 90, put the broth in a “swell parabolic bubble” of the training. This was a signal to take profits.

Trading strategy: Buy shares of the Target on the weakness of the monthly, quarterly and annual pivots at $113.68, $112.43, and $111.21, respectively, and reduce the holdings on the strength of the weekly pivot at $120.09.

How to use my value levels and risky levels: The share price closing price on Dec. 31, 2019, has been an entry to my proprietary analytics. Half-yearly and annual, the levels are still on the charts. Each calculation uses the past nine closes in these time horizons.

The second quarter of 2020 the level has been established based on the 31 March, close by, and the level of the month of May was established based on the April 30 close. New weekly levels are calculated following the end of each week, while new quarterly levels occur at the end of each quarter. Half-yearly levels are updated at mid-year, the levels are set throughout the year.

My theory is that nine years of volatility between the farm are to assume all possible bullish or bearish event for the stock are taken into account. To capture the volatility of stock prices, investors should purchase shares of the weakness of a plan, the value and reduce the holdings of the strength to a risky level. A pivot is a level value of the risk level that was violated in its time horizon. Hubs act as magnets that have a high likelihood to be re-tested prior to their time horizon expires.

How to use 12 x 3 x 3 weekly slow stochastic readings: My choice of using 12 x 3 x 3 weekly slow stochastic readings has been based on the backtesting of many methods of reading the stock prices of the momentum with the objective of finding the combination that resulted in the least number of false signals. I’ve been following the stock market crash of 1987, so I was happy with the results of more than 30 years.

The stochastic reading covers the duration of 12 weeks, high, low, and close for the stock. There is a row of calculation of the difference between the highest and the lowest compared to the farm. These levels are modified for a fast reading and slow reading, and I found that the slow playback will work best.

The stochastic reading scales between 00.00 and 100.00 with readings above 80.00 considered as overbought and readings below 20.00 regarded as oversold. A reading above 90.00 is considered to be a “swell parabolic bubble” of the training, which is usually followed by a decline of 10% to 20% over the next three to five months. A reading below 10.00 is considered to be “too cheap to ignore”, which is usually followed by a gain of 10% to 20% over the next three to five months.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.


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