Target Shares Still in the 'Buy' Zone

Nov. 17th, 2020 Target Shares Still in the 'Buy' Zone Dear Reader, Yesterday, we looked at a Daily Price Chart of the NVIDIA Corp., noting that the stock had retraced below the Upper Keltner Channel offering a lowered risk buying opportunity. For today's Trade of the Day e-letter we will be looking at a stock that we previously highlighted in this newsletter and see how the stock has performed since. For today's Trade of the Day we will be looking at a daily price chart for Target Corp. stock symbol: TGT. Before breaking down TGT's daily chart let's first review what products and services this company offers. Target Corporation operates as a general merchandise retailer in the United States. The company offers food assortments, including perishables, dry grocery, dairy, and frozen items; apparel, accessories, home decor products, electronics, toys, seasonal offerings, and other merchandise; beauty and household essentials; The company also provides in-store amenities, such as Target Cafe, Target Optical, Starbucks, and other food service offerings. Below is a Daily Price Chart with the Keltner Channels for Target Corp. In the Sep. 17th edition for Trade of the Day, Target Corp. was featured as the highlighted stock. In the chart below, the date when TGT was featured has been circled. Now, let's begin to break down the daily chart for TGT stock.

When TGT was originally featured in this newsletter the stock was trading at 147.99. As the chart shows, TGT stock is now trading at 165.18 per share. When we featured TGT, our original price target for TGT stock was 161.35 per share. This price target has now been surpassed. Our updated price target for TGT stock is 176.15 per share.

Buy TGT Stock Just as we noted on Sep. 17th, TGT stock is again trading below the Upper Keltner Channel and is in the Keltner Channel 'Buy Zone'. Since TGT stock is again trading in the Keltner Channel 'Buy Zone', this offers us another lower risk opportunity to enter a trade for TGT. Target Corp. is still on a PowerTrend 'Buy' signal and the stock should be purchased. How well has this trade performed? Since we featured TGT in the Trade of the Day, the stock has gone on to see an increase of 11.6%. On Sep. 17th we highlighted the option purchase trade for TGT which is shown below in the Optioneering Calculator screenshot.

Interested in accessing the Optioneering Calculators? Join one of Chuck's Trading Services for unlimited access! The Optioneering Team has option calculators for six different option strategies that allow you to calculate the profit potential for an option trade before you take the trade. When this trade was initiated on Sep. 17th, 2020, the cost of the call option was 13.28 points. At market close on 10/2/20, this option's expiry, TGT stock was trading at 165.18 per share. This means that the option's value has increased to 24.10 points at the option's expiration. This means that by Oct. 2nd, this trade had produced an 81.5% return in just over two weeks' time. The leverage offered by the call option allowed this trade to realize a much larger gain than just simply holding the stock shares for the same period of time. Allowing Profitable Trades to Continue Following my Trade Management Guidelines, when an option purchase trade produces a profit, this trade's profits should be rolled over into a new option purchase with an expiration date that is further out. To perform this process, you could either allow the option to expire or 'sell to close' the option prior to the expiration and collect the premium. After this, you would then 'buy to open' the new option contract with a new expiration date. I rollover my profitable option purchase trades for a few reasons. The first is that by rolling over the profit from the original trade, you are able to reduce the cost basis for the new trade by this amount. Next, you have the opportunity for a winning trade to continue profiting and compounding your returns. Rolling over profitable options trades allows traders to have the opportunity to continue to benefit from a stock's underlying trend. If a stock is still in a bullish run, but your profitable call option is nearing its expiration, this option will not be able to take advantage of any future bullish price movement. But, if you rollover the profits from this trade into a new call option with an expiration date that is further out, the option will have the chance to continue to profit if the stock rises. Start Trading Like Chuck Today! Today Chuck is offering you a very special deal. As a Trade of the Day subscriber, if you sign up and become a member of The Chuck Hughes Inner Circle Trading Service today, he will give you special discount. Just call Brad at 1-866-661-5664 or 1-310-647-5664 to join and use the code "Optioneering VIP" to receive special pricing! Wishing You the Best in Investing Success,

Chuck Hughes Editor, Trade of the Day

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