Target is beginning the new week with an impressive gain.  The stock has been stuck in a narrow range since a nasty sell off back on March 6th.  Might this sideways pattern soon end with an upside resolution?  The odds are increasing.  With less than an hour to go in the session shares are up nearly 4% on accelerating trade.  This impressive move has driven TGT to new May highs and within easy striking distance of a meaningful breakout.  Just last month the stock was tracing out a similar set up but failed to clear heavy resistance near $73.70.   With earnings on the horizon(May 23rd)TGT is poised once again for a fresh rally leg.

Trading notes:  

TGT is pennies away from piercing a key overhead trendline that links the March and April highs. 

A clear take out of the $73.70 area will clear multi-week April highs.

Nearby support is now in place between $72.30(initial May high)and $71(last week’s high).  A close back below $68.00 would violate the May low indicating more range bound trade is ahead.

TGT sports a rather high SIR(10.3).  Since the near breakout back on April 30th the short interest ratio has increased.  Quite a bit of potential upside fuel to say the least.

Earnings are due next week(May 23/AM). 

Analysts at Baird made positive comments about the company today.  Baird has an “Outperform” rating on the stock and a price target of $85.00.

At time of publication we are long TGT in some managed accounts.