With the albatross of a credit card security breach still hanging around its neck, it is no wonder that retail giant
Target (NYSE: TGT)
is out of favor on Wall Street. In just the past week we've seen Cowen
& Co.'s Consumer Tracking Survey report "meaningful decreases" in
customer satisfaction. And Standard & Poor's lowered the company's
credit rating one notch to "A."
But the charts tell a different story, and it is a good one.
We can attribute the February rally, following weak fourth-quarter
results, to excessive pessimism. The news was bad, but not as bad as
expected, and shares soared. And now after a four-week slide, it looks
as if TGT is ready to break out again. Bad news be damned.
The February rally pushed the stock above the 50-day moving average
for the first time since the data breach was reported in December. And
the March pullback found support back at the moving average in what
chart watchers call a successful test of the initial breakout.
Johnny-come-lately bulls had a second chance to buy and they took it.
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