Trading Idea: Momentum Building in Target
Published on Tuesday, 05 February 2013 08:36 Written by TradersHuddle Wire
New York, February 5th (TradersHuddle.com) - Shares of Target Corporation (NYSE:TGT) closed the trading session at $60.85 with its price action in a very tight range, given that calculated support is set at $58.01 and the calculated resistance is set at $61.44.
Target Corporation (NYSE:TGT) operates general merchandise discount stores in the United States. The Minneapolis, Minnesota company operates general merchandise and food discount stores and a fully integrated online business.
Target's stock price action indicates that both sellers and buyers are materializing very close to each other. This signals an area where momentum is building, since the stock can resolve by breaking out of the developing tight range.
Traders wanting to establish a position should pay close attention to Target's price action, as any movement outside its predefined range of $58.01 and $61.44 could grasp the attention of momentum buyers that look for a big movement in the price of the stock. Traders need to be aware that tight range resolution works both ways, hence, a move below support could spark above the average selling. A tiered approach could be the best way to start a position; enter into it while the stock is in the tight range, and then add to this position as it breaks and closes above resistance.