Target Corporation (NYSE: TGT)

Target Corporation operates as a general merchandise retailer. It offers household essentials, including pharmacy, beauty, personal care, baby care, cleaning, and paper products; dry grocery, dairy, frozen food, beverages, candy, snacks, deli, bakery, meat, produce, and pet supplies; and apparel for women, men, boys, girls, toddlers, infants, and newborns, as well as intimate apparel, jewelry, accessories, and shoes. The company also provides home furnishings and décor, such as furniture, lighting, kitchenware, small appliances, home décor, bed and bath, home improvement, and automotive products, as well as seasonal merchandise, such as patio furniture and holiday décor; music, movies, books, computer software, sporting goods, and toys, as well as electronics, such as video game hardware and software.

Take a look at the 1-year chart of Target (NYSE: TGT) with added notations:

1-year chart of Target (NYSE: TGT)

TGT hit a high of $63 back in October, and eventually fell down to $54 last month. Since that low, the stock has rallied back up to the $63 resistance (red) and appears to have now completely formed the cup (green) and handle (blue) of a cup and handle pattern.

The Tale of the Tape: TGT has formed a C&H pattern. A long trade could be entered on a breakout above the $63 level, with a stop placed under the point of entry.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT