Target Stock Fresh Off Record High Ahead of Earnings

A shift in the options pits could push TGT even higher

Digital Content Manager
Aug 12, 2021 at 3:35 PM
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Though the earnings season has started to cool down, there is still a handful of major names scheduled to report. Noticeably among them is retail giant Target Corporation (NYSE:TGT), which was last seen down 0.4% at $262.09, ahead of its second-quarter earnings call, which is due out before the open on Wednesday, Aug.18. Below, we will dive deeper into TGT'S performance of late, as well some of its previous post-earnings activity. 

Target stock has been tearing up the charts for much of the past 12 months, nabbing record after record, with long-term support coming from its 40-day moving average. In fact, just yesterday shares surged to an all-time high of $267.06. Year-over-year, TGT boasts a 94.6% lead.

TGT 40 Day

Options traders are pricing in an 6.3% post-earnings swing for the stock this time, which is smaller than the 8.5% move the equity averaged after its last eight reports, regardless of direction. The security enjoyed positive next-day returns following five of the reports, including a 20.4% pop in August 2019.

A shift in sentiment over in the options pits could create additional tailwinds for Target stock. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio sits higher than 93% of readings from the past year. This indicates long puts are getting picked up at a faster-than-usual rate.

It is also worth noting Target stock's Schaeffer's Volatility Scorecard (SVS) sits at a high 97 out of 100, suggesting it has exceeded options traders' volatility expectations in the past year -- a boon for premium buyers.

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