Target earnings: Prepare for ‘nothing but awful,’ analyst says
Target Corp. is expected to announce first-quarter earnings before the opening bell on Wednesday. Retailers from Macy’s Inc. M, -1.68% to J.C. Penney Co. Inc. JCP, +5.99% have reported earnings and sales misses and seen their stock tumble over recent weeks.
Target’s TGT, -1.48% earnings are expected to fall along the same lines, with Macquarie Research analysts preparing for the worst. Target shares have an average hold rating with a $73.36 target price, 32.5% higher than Monday’s close.
Will Tough Retail Backdrop Hurt Target’s (TGT) Q1 Earnings?
Investors’ don’t seem enthusiastic ahead of Target Corp. ‘s TGT first-quarter fiscal 2017 earnings release, which is slated to be announced on May 17. We observe that the stock has declined roughly 2.5% in the past five days.
In fact, shares of this operator of general merchandise stores have plunged approximately 14.4% in the past three months, while the Zacks categorized Retail-Discount & Variety industry has declined 3.4%. However, the broader Retail-Wholesale sector of which both are part of, has gained 7.9%.
A Target Corporation (TGT) Stock Turnaround? Don’t Bet on It.
Target’s comeback initiatives keep running into walls. TGT stock is due for another post-earnings dip on Wednesday. The retail industry has been in steep decline, and Target Corporation (NYSE:TGT) is no exception. Retailers have been closing stores and laying off employees as a way to cut costs and transition greater focus to online resources.
Target has particularly struggled with the increase in online shopping and competition with Amazon.com, Inc. (NASDAQ:AMZN), and TGT stock has suffered as a response — down more than 20% year-to-date alone.The company reports first-quarter earnings on May 17, and we predict further downside in Target stock.
Today’s Trading Lesson…
How to Identify Saturation Points
One of the most common emails I get is: “You keep talking about Saturation Points, what are they and how do I spot them?”
Saturation Points took me years to understand, hopefully I can make it easier for you today. 🙂 Essentially we are looking for areas in price action where the current momentum move is hard to sustain. Saturation points are preceded by “well-bid or well-offered candlesticks.” This means higher highs or higher lows.
You must see consecutive WB or WO, the more the better. As you move closer to well-bid candle #5, you can expect the move is “saturating,” or running out of steam. This means you would not be a buyer, on a higher open the next day, but a seller into the late buying.
When the ducks are quaking, feed them.
The chart of BIDU is a terrific example because it gives us textbook price action and volume. We see an exhaustion candlestick, and six out of the previous candlesticks are well-bid. The key to remember here… to identify a Saturation Point, you are not looking for a large green candlestick, or a large spike in volume, or 6 well-bid candlesticks… YOU ARE LOOKING FOR ALL OF THEM.
It is the unique combination of the setup that makes it so powerful. You will also notice that you don’t need indicators. When you become a tape reader, you only need price action and volume.
In the BIDU trade, if the stock price opens higher, and pushes higher, you would be selling into momentum, the last of the buyers.
One of the most exciting positive side effects about learning saturation points is that it influences how read read charts. You will never simply see “patterns” again. You are looking for points of order flow, momentum, and that momentum ending in Saturation Points. And Saturation Points are formed by individual candlesticks.
You no longer need indicators. You are never lost, because you know where you are going. When I learned this concept, everything changed. I hope the same happens for you.
Note: Inside candlesticks are neutral.
On the Tape Today | 5-17-17
KMX CARMAX Inc showing solid fuel candlesticks on a breakout. Game planning a limit order $60.50 to buy instead of using a buy-stop. Stop loss, if filled on a close below $59. Initial target to sell is at the 50% retracement level of $64. Short sellers could be caught on the wrong side here, the bullish momentum will be quick if you are filled because they need to cover (buy) to exit.
AKAM Akami Tech pausing perfectly after bearish momentum just below what was $50 support. Looking for a new swing trade short sale to trigger. Planning a $49 sell stop to enter with a target to cover of $44.25. If the stock gaps lower today with the stock market expected to see selling, do not short the lower open. Wait for the first bounce to improve your risk reward ratio.
Dow Set To Fall 100 Points On Trump Woes; 4 Stocks Are In Buy Range
Futures for the Dow industrials, S&P 500 index and other major averages fell significantly on fresh negative headlines on President Trump. That followed a mixed session Tuesday in which the Nasdaq rallied, hitting fresh record highs, while the Dow Jones industrial average and S&P 500 closed slightly lower.
Late Tuesday, the New York Times, followed by several other big publications, reported that Trump had asked then-FBI Director James Comey to drop an investigation into former National Security Advisor Michael Flynn. The White House denied the reports.
Trump, who abruptly fired Comey last week, is also under pressure over a Washington Post article claiming that he gave highly classified information to Russian officials the day after ousting the FBI chief. The political furor makes it harder for Trump and the GOP Congress to focus on pro-growth agenda items, notably tax cuts.
Stock Market Today: Heatmap of the S&P 500
Stocks to Trade 5-17-17 | Wednesday Edition
Bullish Momentum: MCHP, CTRP, BIDU, SRPT, RH, MOMO
Bearish Momentum: dks, cbi, sm, o, sbgi, agn
Long-Term Order Flow
Bullish Order Flow: MOMO, RH, BIDU, BABA, WYNN, UAL, AAOI, ADSK, DE, AMZN, EA, AVGO, HD, CC, BA, MAR, WDC, APPL, AET, FB, NFLX
Bearish Order Flow: cbi, sm, lulu, yelp, akam, oxy, dfs, tsco, eqt, slb, oke, dvn, clr, esrx, apc, car, hog, x, twlo
2X Normal Volume: DKS, BABA, TJX, MOMO, HD, ROST, CBI, SBGI
Inside Days: snap, csco, jd, hal mat, cvx, skx, tsla, nem, mos, yelp, lyb, nov, wba, wdc, cof
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