Target (TGT) Battles Fierce Competition During Major Promotional Week

Target (TGT) and the broader retail space will be in focus for traders this week, as several giants of the sector are offering major sales to entice consumers. 

Target’s Circle Week is underway now and will continue through Oct. 11, with discounts of up to 50% available for various types of products for Target Circle members. But Target faces fierce competition from two of the biggest players in the field. Amazon (AMZN) Prime’s Big Deal Days is today and tomorrow exclusively for Prime members. Meanwhile, Walmart (WMT) also begins its Walmart Deals sales event from today to Oct. 12, which conversely to Target and Amazon is available to all shoppers.

Target shares have struggled during the past year, with the stock down about -45% from its 52-week high of 161.50. Price has been largely sideways for about seven months, traveling in a relatively wide range between about 86 to 107. Traders find themselves facing price action that recently made new 52-week lows of 86.30, but for the most part held on around this supportive area that dates back to the old lows that were established at similar levels after the tariff announcement news shock even in April. 

For the shorter-term, traders can look to this same area near 90, as it coincidentally lines up with the 21-day Exponential Moving Average. Beyond that, the 63-day EMA comes in near 95, which is about where volume activity starts picking up and concentrates near 97 at the yearly Volume Profile Point of Control (heaviest trading price area). This could be a potential area for congestion and price slowdown if the bulls manage to rally.

But a longer-term view paints a different and perhaps more problematic picture, one in which price has already fallen below a key long-term level. A 10-year chart shows that the level around 90 marked significant highs in September 2018 and July 2019. After an upside breakout, this same area of former resistance then became support and price saw a notable bounce there in March 2020. Now that this area has been breached, the next similar area of support/resistance is around the 80 level.

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