Target’s Chart is Screaming, ‘Sell!’

by Sam Collins | October 24, 2013 1:26 am

Target (TGT[1]) — This retail giant with nearly 1,800 stores reported disappointing fiscal second-quarter results in August of $0.95 a share versus $1.06 for the same period last year. And the Zacks consensus estimate for fiscal 2014, ended in January, has fallen 10% in the past 60 days to $3.88, and it has decreased by 8% to $5 for fiscal 2015. S&P is forecasting fiscal 2014 earnings of $3.93 per share.

Technically, TGT violated its long-term bullish support line in September, and a recent rally has failed to rise above its 50-day moving average at $64.38. The chart flashed a death cross (50-day moving average crossed down through the 200-day moving average) in September, a very bearish signal. And the stochastic flashed a near-term sell signal Wednesday.

There is support at the December low of $60, which may contain the downtrend. However, even if the trend stabilizes at $60, so much technical damage has been done that it will take a great deal of time to recover. And if $60 fails to hold, look out below, because the next support zone is at $45 to $50.

TGT Chart
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Chart Key[2]

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