Will Earnings Boost Up Price?

Target (TGT) stock price has been stuck in a narrow consolidation zone ranging between $130 and $138 since mid June. TGT stock price fell sharply after facing rejection above $160 level. It fell roughly 21% from $160 and formed a support at $126.30 during the start of June.

The sharp decline came after Target corporation reported its quarter 1 financial results. The retailer beat consensus estimates of revenue as well as earnings per share.

Target’s sales growth wasn’t impressive year over year. Comparable sales were also flat in the first quarter. The retailer was stuck with the prior full year guidance. 

The stock price has been hovering in the consolidation zone for more than a month. If a candle can close below $130 and witnesses follow up bearish momentum, there is a possibility that the price might fall to $126.30. On the other hand, the bulls could push price above $150 psychological level. 

Quarter 2 Financial Result to be Released On 16 August

Target corporation will release its quarter 2 earnings results on August 16. The consensus has estimated the revenue to be $25.265 Billion and the earning per share to be $1.455. 

Analysts are expecting the topline pressure to persist for a few more quarters. Unfavorable economic conditions are hampering growth; profits are disappointing.

Since the pandemic hike, the valuation has come down to a reasonable level. The student loan repayment will also resume soon which will also zap the spending power of customers. The overall consumer discretionary spending was also weak in quarter 2.

The good news related to the retailer is that convenience is a strong factor. A comeback may take a while and there is a possibility of further decline as the company muddles through a rugged environment. 

Will TGT Stock Price Break the Consolidation Zone After Earnings?

The stock price has melted below 20,50,100 and 200-day exponential moving averages, suggesting strong bearish momentum. Chaikin money flow score has witnessed a growth from -0.21 to -0.11 since 7 August, indicating rise in strength and capital inflow. However, chaikin money flow is still below the 0 mark which indicates weakness. 

The relative strength index has dropped below the 50 mark and stands at 42.68 implying bearish momentum in the price. The bollinger bands have contracted since the consolidation started indicating low volatility in the market.

Conclusion 

The market structure and price action of Target corporation stock is indecisive as price is stuck in a consolidation zone. Technical parameters suggest high confluence of bears over the price. For long, investors who are looking to buy a good retailer, target stock looks like a decent deal.

Technical levels 

Major support: $126.30 and $122.30

Major resistance: $138 and $150

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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