Shares are bouncing off their lowest level since November
Target Corp (NYSE:TGT) announced better-than-expected second-quarter earnings and revenue earlier, with sales rising as consumers splurged on discretionary items. While the retailer kept its full-year sales forecast, it raised its profit outlook. At last check, TGT was up 16.1% to trade at $166.29.
Shares are bouncing off their lowest level since November, and are also on track for their best single-day percentage gain this year. TGT hit its highest level in about four months and is now looking to close above the 80-day moving average, after this trendline capped rallies in July and on Monday. In the last 12 months, Target stock added 33%.
Short-term options traders have been overwhelmingly bearish. This is per the security's Schaeffer's put/call open interest ratio (SOIR) of 1.26, which ranks higher than all other annual readings. An unwinding of this pessimism could create more tailwinds for TGT.
Drilling down to today's options activity, 48,000 calls and 23,000 puts have already crossed the tape, which is a whopping 25 times the intraday average volume. The weekly 8/23 170-strike call is the most active contract, followed by the 167.50-strike call in that same series, with new positions being opened at both.
It’s also worth noting that the equity's Schaeffer's Volatility Scorecard (SVS) stands at 85 out of 100. This indicates TGT outperformed volatility expectations over the last 12 months.