Target Corp. (TGT) shares jumped more than 2% on Wednesday afternoon after reporting better-than-expected first quarter financial results. The popular retailer reported revenue that decreased 1.1% to $16.02 billion – beating consensus estimates by $400 million – and net income of $1.21 per share – beating consensus estimates by $0.30 per share. The company also returned $637 million to shareholders through dividends and repurchases.

Despite the modest gains, the company’s stock remains more than 20% lower so far this year due to weakening financials and intensifying competition from Wal-Mart Stores Inc. (WMT) and Amazon.com Inc. (AMZN). Analyst expectations have been exceptionally low given this recent performance, which may have made it easier to beat consensus estimates this quarter. Further improvements in top- and bottom-line results could send the stock higher this year.

On a technical level, the stock has been trending higher since its early-April bottom although it experienced a road bump in early-May. Traders that are bullish on the stock should watch for a sustained breakout from its R2 resistance at $57.89 to close the gap and reach the 200-day moving average at $64.78. Traders that are bearish may want to watch for a breakdown from lower trend line support and the 50-day moving average at $54.33 to S1 support at $53.04.

Technical indicators provide few clues as to future price movements. The relative strength index (RSI) -- which measures price-movement velocity and are often used to predict turning points -- remains at a neutral 52.38, although the moving average convergence-divergence (MACD) may have experienced a bearish crossover. Traders should watch for any changes in these indicators to provide hints into future price direction, while possibly favoring bearish trades given the stock’s overall trend since earlier this year.

Charts courtesy of StockCharts.com. Author holds no position in the stock(s) mentioned except through passively-managed index funds.

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