Target Stock Flies Higher After Q4 Earnings: A Technical Analysis

Target Corp. TGT shares were trading higher after the company reported better-than-expected fourth-quarter EPS results Tuesday.

The company reported earnings per share of $3.19, beating the estimate of $2.86. Sales came in at $31 billion, missing the estimate of $31.41 billion.

Target stock was up 11.08% at $221.90 Tuesday afternoon. 

See Also: Target's Stock Gains Post Q4 EPS Beat; Top-Line Misses Consensus

Target Daily Chart Analysis

• Shares saw a strong gap higher after they were able to recover support following a fake break below the support level. The stock fell below the $200 level briefly for a few days and then was able to recover the level and saw strong earnings, causing a large gap higher.
• The stock now sits between the $200 support level and the $265 resistance level, formed mid-2021 when the stock saw what traders call a double top near the level.
• The stock is trading above the 50-day moving average (green) but below the 200-day moving average (blue), indicating the stock looks to be consolidating. The 50-day moving average may hold as an area of support while the 200-day moving average may act as an area of resistance.
• The Relative Strength Index (RSI) saw a strong push higher and moved up to 60 on the indicator. This shows that there were a large sum of buyers that pushed into the market after the stock reported earnings. If the RSI can hold at this level, the stock will likely continue to climb higher and keep pushing toward the resistance level.

What’s Next For Target?

Target being able to bounce off support and push higher right before earnings was a bullish sign. Following the earnings report, the stock pushed higher and could be on the start of an upward trend after seeing a bearish trend for the last six months.

Bullish traders are looking to see the stock consolidate for a time and catch its breath after the large gain. Bulls then want to see the stock form higher lows and work up toward the $265 resistance level, eventually being able to cross above and hold above the level. Bearish traders are looking to see the stock fade back lower once again and fall back to the $200 support level.

Photo courtesy of Target.