Spring Has Sprung for Retail

Hey Shoppers,

Have you been to the mall lately?

WOW! Be careful because it is mobbed.

People are out and about — finally!!

I’ve scoured the retail stocks and the one I like is Target (Ticker: TGT).

Target had a huge move –almost 4.5% — on Friday, trading up $7.94, from $179.61 to closing near the high of the day at $188.30.

As you can see on the chart, it has broken out of a trading range it had been since March 9.

With this breakout, I think TGT is on its way back to trading $200.

Looking at the Apr16 call options, the strikes are in increments of five, instead of two and half, which limits my spread choices.

I could buy the five point call spread, 190/195, or the ten point spread, 190/200 for a dollar more.

I like buying the five point spread here because I’m spending less money for a likelier outcome — the stock will trade $195 before it trades $200.

The bid/ask spread is a bit wide, but they are trading, so the volume is there.

I would like to buy the 190/195 call spread and pay $1.40-$1.50.

I will sell this spread and take my loss once it trades below a dollar.

On the upside, I will begin to take profits when the spread is trading $2.50 and better.

As for going to the mall, at least I refrained from swimming in the fountain like my sister and I did when we were little.

Get out and shop!!

Thanks for Reading … See You Next Tuesday!

Licia Leslie

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