65.31 +1.01 (+1.54%) Sell

Profit booking on the minds of TGT investors as it marginally outperforms

13 min read

TARGET CORP delivered good returns today. It grew by +1.54% to close at 65.31. During the last week it lost -3.66% and saw a maximum drawdown of -5.12% before bouncing back.

[Themes containing TGT]

Buy-and-Hold investors in TGT experienced a maximum drawdown of -27.3% over the last three months. It lost -25.07% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +20.33%.


TGT has been underperforming the SP500 index in recent time, after having outperformed till 10 Mar, 2016. Over the last 2 years 11 months and 14 days, TGT underperformed the SP500 index on 47% days. Which indicates that on days TGT underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months TGT was mostly loss making and delivered on average -0.43% per day. It's best return during this period (of +3.08%) was on Tuesday, 27 Nov, 2018. While it's worst loss in the same period (of -11.26%) was on Tuesday, 20 Nov, 2018. There was initially a bullish trend during this period which started on 1 Nov, 2018 and went on till 8 Nov, 2018. The bullish trend returned +4.66% to investors. This was followed by a bearish trend that started on 9 Nov, 2018 and ended on 20 Nov, 2018. This bearish trend lost -23.02% of investor capital.

TGT had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of TGT and SP500 index were the same. TGT was also a more risky investment than SP500 index as it's worst month in the last year, Nov 2018, returned -15.15% compared to -7.75% returned by SP500 index in Dec 2018. TGT and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both TGT and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Price is what you pay and value is what you get.

TGT is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in TGT's volatility from 1 Oct, 2018 to 20 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that TGT has significant positive skewness in it's return distribution. This indicates that investors can expect TGT to recover from drawdowns quickly. Which makes TGT a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in TGT derivatives at this moment can consider 'Bull Call Spread' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than TGT. Therefore, SP500 must receive a lower allocation than TGT in your portfolio. TGT usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in TGT), KEYS is a small cap that deserves to be closely tracked for investment opportunities.

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