Retail Stock Has the Wind at It's Back

Analysts have yet to respond to Target stock's recent breakout

Apr 12, 2022 at 11:35 AM
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The shares of Target Corporation (NYSE:TGT) are breaking above multiple technical ceilings on the charts, including all daily moving averages. In addition, the equity has moved above recent consolidation, as well as its October 2021 lows. And now that TGT is trading above its year-to-date and year-over-year breakeven levels, it's the perfect time speculate with calls.

TGT Chart April 8

There's still of room for upgrades amongst the brokerage bunch, which could send the shares even higher. This is according to the nine out of 35 analysts in coverage that still rate TGT a tepid hold "hold."   

A shift in the options pits could create additional tailwinds for the equity. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Target stock's 50-day put/call volume ratio sits higher than 93% of readings in its annual range. In the past, similar readings have typically preceded prolonged bullish rallies for the security.

It's also worth noting that the stock tends to outperform volatility expectations. This is per TGT's Schaeffer's Volatility Scorecard (SVS), which ranks at 96 out of a possible 100.

Our recommended July call has a leverage ratio of 7, and will double in a 13.4% pop on the underlying shares.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this TGT commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

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