As you know, I’m a big fan of pairs trading. And one of my favorite pairs trades involves two retail stocks in particular, one of which I’m super bearish on that many of you may own because it’s a popular stock, so I figured it would be a good time to discuss it: Target.
As I said, I’m super bearish on Target, even after it’s already fallen a staggering 45% in just two month’s time. Target was at $250 a share back on April 20 and by lunchtime this past Friday it was sitting at $140.
Target is generally a great stock so it’s probably a good time to buy, right? Wrong…
Even though the U.S. stock market was closed on Monday, futures and international markets were still open and their trading action will have an impact on the stocks we trade.
When I sat down to film this video Monday morning, the E-mini Dow and Nasdaq were up about 154 and 83 points, respectively. If there aren’t any major wrinkles or surprises over the next few hours or so, markets should open up higher on Tuesday…
Which would be great following last week’s tumultuous trading action…
The best part is that the TLT, which is still trading sideways, isn’t putting as much pressure on stock right now as it has the past several months. In other words, it looks like things are overdone for the time being and that the market should start moving up from here.
Sector Analysis is typically employed by traders and investors who specialize in a particular sector, or who use a top-down or sector rotation approach to investing. The most promising sectors are identified first, and then the trader or investor reviews stocks within that sector to determine which ones will ultimately be purchased. A sector rotation strategy may be employed by trading or investing in particular stocks or by employing sector-based exchange-traded funds.
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