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Target on the Verge of a Double-Digit Plunge

Target broke from a triple-bottom, and the sell-off appears set to continue


Target (TGT) — This retail giant, which operates over 1,900 stores in the U.S. and Canada, has been hurt by a massive security breach. A recent investigation found that “certain guest information, separate from the payment card data previously disclosed, was taken during the breach.”

Based on an expected 2.5% decline in comparable store sales, the company lowered its adjusted Q4 earnings estimates to a range of $1.20-$1.30 versus prior guidance of $1.50-$1.60.

The stock was not acting well even before the database breach. It broke down in August on a price gap at about $68, and for four months appeared to be forming a base. However, on Jan. 14, TGT broke from a triple-bottom and looks to be headed much lower. A base at about $50 appears on the weekly charts, so that is my downside target.

Sell TGT short with a stop-loss order at $64. Short-selling is a speculative technique that should only be used by traders willing to accept the risks. Check with your broker for any special requirements.

TGT Chart
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