A Short Question for Target

You're probably aware by now that Target (TGT) is having a rough day. The stock was down about 3% as of noon on heavy volume, and is on the verge of losing the psychologically important $60 handle as I write. Since the stock is already down, would it make sense to short Target? Let's look to the charts for evidence.

First, the sector itself doesn't look good. In this case, I'm using the SPDR S&P Retail ETF (XRT) as an indicator. Yes, XRT has rallied recently, but the chart is dominated by a series of lower highs (LH). Currently, XRT is forming a bear flag, similar to the one that occurred on Amazon's (AMZN) chart recently. Note that on the current rally, XRT's volume is fading as the exchange-traded fund rallies (shaded yellow). This shows that bulls are wary to add money to this sector as the price moves higher. Their lack of commitment indicates that the next likely move for the retail sector is lower....229 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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