Boosted by a stronger than expected earnings report, US retailer Target (TGT) rallied 6.0% yesterday and climbed three spots within the Green Favored Zone of the SIA S&P 100 Index Report to 13th place. Since last summer, Target shares have been steadily advancing in a step pattern of rallies followed by periods of consolidation at higher levels. Note how previous resistance levels near $170 and $200 reversed polarity and became support following breakouts. Yesterday, the shares staged a major breakout, clearing $125 to a new all-time high on increased volume, signaling a surge in investor interest and the start of a new rally phase within a larger uptrend.
Measured moves from the two most recent trading ranges, $170-$200 and $200-$215, suggest potential upside resistance tests on trend near $230, $245 and $260, along with the $250 round number. Initial support appears near $200, a round number and recent breakout point which also coincides with the 50-day average.
Since a winter correction bottomed out in March, Target (TGT) shares have resumed their primary uptrend. First, a bullish Double Top breakout called off a bearish double bottom signal, then the shares broke out over $200.00 to complete a bullish Spread Double Top pattern and signal the start of a new upleg. The shares have remained under accumulation into May, rallying to new all-time highs approaching $220.00.
Based on horizontal and vertical counts, next potential upside resistance tests on trend appear near $230.50, $245.10 and $260.10. Initial support appears in the $200.00 to $202.00 area where a 3-box reversal, round number and recent breakout retest cluster.
With a bullish SMAX score of 7, TGT is exhibiting near-term strength against the asset classes.
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