Buy Target Corp. and Set a Limit Order to Sell Trex Co.
From a technical perspective, Target Corp. (TGT) has filled about half of the gap that opened after earnings in March. Historically, a technical level like this has acted as a strong level of support, which makes this an attractive opportunity to open a bullish trade.
Like the rest of the market, TGT has pulled back from its prior highs on concerns that interest rates (and inflation) will remain high this year. However, after yesterday's Fed announcement that was much more dovish than expected, we think the selling has been overdone.
As long as hiring and consumer spending trends remain positive, retail looks undervalued. A positive forecast from Predictive Alpha confirms that stance with a reasonable short-term target. Because the market has been so volatile over the last two months, we recommend setting a sell order once the shares have been purchased with a limit order that is "Good 'til Cancelled" (GTC). That strategy will allow us to take advantage of any unexpected price spikes.
Set a limit order to buy Target Corp (TGT) for $157.75 or less.
TGT's share price was $156.94 when the signal was generated on May 2, 2024.
We expect TGT's target price of $161.20 to be reached by May 31, 2024 (21 trading days from today).
Your next steps:
Set a limit order to enter the trade for $157.75 or less.
Once the initial buy order is filled, your next step is to:
Set a Good 'til Cancelled limit order to close the position at $161.20.
If the stock demonstrates strong bullish momentum within the first 10 days of the trade, we may recommend allowing the trade to run further and canceling the sell order. If market conditions justify a change, we will send you an alert at that time advising you of a new price target and stop loss.
We will not hold this trade any longer than May 31, 2024.
Note: Although our trade on Trex Company Inc. (TREX) briefly hit its target price yesterday after the Fed announcement, it does not appear that there was enough volume to assume anyone could get out of the trade realistically.
We expect the stock to jump back up above its target in the short term, and we recommend setting a "Good 'til Cancelled" (GTC) limit order to sell the shares for $91.91. That way, we can take advantage of any brief spikes to the upside if the market remains choppy.
Trade Notes
Now, please be aware that some stocks can be volatile — especially after a recommendation is issued.
If the stock is out of our maximum buy range, we do not recommend chasing the stock. You can use a limit order for our maximum buy price and allow the stock to settle.
We recommend checking out a few of our training videos if you have any concerns about trading. You can learn…
Timing is everything when it comes to these trades, so head to your app store now, download the free TradeSmith app, and enable push notifications… because the next great trade is right around the corner!
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Sincerely,
John Jagerson & Wade Hansen Analysts, Predictive Alpha Prime
P.S. For any questions or concerns, check out your brand-new Frequently Asked Questions page, which you can access here. Otherwise, reach out to or contact your Customer Concierge Team at 866-385-2076 or JohnandWade@tradesmith.com Monday through Friday, 9:00 a.m. to 5:00 p.m. ET. Our dedicated team will be glad to assist you.
TradeSmith is not registered as an investment adviser and operates under the publishers' exemption of the Investment Advisers Act of 1940. The investments and strategies discussed in TradeSmith's content do not constitute personalized investment advice. Any trading or investment decisions you take are in reliance on your own analysis and judgment and not in reliance on TradeSmith. There are risks inherent in investing and past investment performance is not indicative of future results.
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