Target Stock Holds Chart Support Ahead of Earnings

Target is expected to report earnings before tomorrow's open

Managing Editor
Mar 5, 2018 at 1:39 PM
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Retail earnings are back in full swing, with Target Corporation (NYSE:TGT) set to report fourth-quarter earnings tomorrow morning. Overall, Target stock has had a good year, gaining 30% over the past 12 months, touching an annual high on Jan. 23 of $78.70. Shares of TGT were 0.1% lower to trade at $75.09 at last check, but are maintaining their foothold atop the recently supportive 50-day moving average.

In terms of earnings reactions, the stock dropped almost 10% the day after last quarter's report. Looking back eight quarters, the shares have averaged a post-earnings move of 6.4% in either direction in the session after the company reports. For this particular quarterly report, the options market is pricing in a larger-than-usual 8.1% move for Tuesday's trading, going by implied volatility (IV) data.

In the options pits, traders have been more bearish than normal lately. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows TGT with a 50-day put/call volume ratio of 0.85, ranking in the 86th percentile of its annual range. This indicates puts have been bought to open over calls at a much faster-than-usual clip in the past 10 weeks.

Meanwhile, the security's Schaeffer's Volatility Scorecard (SVS) stands at 80, which tells us that Target shares have handily exceeded options traders' volatility expectations during the past year.


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