• Chart of the Day: Target Corp. (TGT)

    by  • February 14, 2013 11:40 am • Quick Hits, Tony Venosa's Chart of the Day • 0 Comments

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    Today’s chart is of Target Corp. (TGT) which operates general merchandise stores in the United States. The company offers household essentials, including pharmacy, beauty, personal care, baby care, cleaning, and paper products; hardlines comprising music, movies, books, computer software, sporting goods, and toys, as well as electronics that comprise video game hardware and software; apparel and accessories consisting of apparel for women, men, boys, girls, toddlers, infants, and newborns; and intimate apparel, jewelry, accessories, and shoes.

    Ticker:  Target Corp. (TGT)

    Strategy:  Long Trade

    What I Am Looking At:

    • Consumer Discretionary/Retail strength
    • TGT outperformance on a year-over-date basis, +21 percent
    • Technically, shares bounced from a late 2012 pullback which coincided with the July breakout and the 2010 high (teal horizontal band shown on chart)
    • Uptrending channel formation for 2013
    • Enormous put open interest for the March series resides at the 60- and 62.5-strike prices (mostly bought-to-open) could be supportive on potential pullbacks and possible unwinds could create a tailwind for shares
    • Put/call Open interest ratio stands at 2.65, which ranks in the 100th percentile of readings taken during the past year, is an indication of extreme pessimism among option players
    • 50-day buy-to-open put/call ratio is 3.21, indicating the strong preference for puts over calls
    • Short interest has increased over 60 percent since October 2012 as prices are almost back to early October levels
    • Nearly 4 days for short positions to be covered
    • Reports earnings on February 27th, unconfirmed

    Trigger:  Aggressive trade is to buy at the current level, or wait for a potential pullback to the $62.50 level.  Looking for a possible run-up before earnings release. Possible target is the September 2012 high.


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    Tony Venosa, CMT is a Senior Options Strategist and works on the trading desk at Schaeffer’s Investment Research. He joined Schaeffer’s in 2010. He has worked in the finance industry for over 15 years. He began his career as a trading assistant in Chicago on the floor of the Chicago Mercantile Exchange. He later moved upstairs and worked as a commodities broker on both the retail and hedging side. He left the brokerage industry to begin his trading career as a proprietary equities trader at a Chicago firm. In 2000, Tony moved backed to his hometown and continued trading his personal account. He later went on to earn his Chartered Market Technician designation. He earned a B.S. in Finance from Miami University. Tony’s main focus is short-term directional option trading.


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