The U.S. economy, despite facing multiple, serious hazards, continues to chug along. It doesn’t matter what the world throws at it, a trade war, impeachment proceedings, or a slowdown overseas.
In the end, the economy always wins. Well, at least since the 2008 Financial Crisis.
And it’s mostly thanks to one very powerful tool in the U.S.’s war chest:
The indomitable will of the American consumer.
Earlier this year, economists almost unanimously saw a recession coming. If not by Q3 or Q4 2019, then at least by 2020.
Now that we’re here, though, the narrative has changed completely. Corporations are expecting huge growth next year. People continue to gobble-up the goods and services that companies offer them, and real unemployment is still very low.
Meaning that folks have jobs, and more importantly, cash to spend.
And, to no one’s surprise, corporations in the consumer-centric sectors are seeing strong stock performances a result.
In fact, Target Corp. (NYSE: TGT), the famous consumer defensive giant, is approaching yet another new all-time high.
In the daily candlestick chart above, you can see what I’m talking about. TGT is making another break for uncharted territory after going on a nice run in October.
And usually, in situations like these, going long doesn’t make a lick of sense. After all, buying-in at the all-time high has historically been a bad idea.
However, TGT finds itself in a unique position. A sell-off just happened, but the stock also set a higher low. It even set two. Today, TGT rocketed upwards on the heels of some positive trade war news from White House economic advisor Larry Kudlow.
If it keeps rising, past key support at the all-time high, there could a massive breakout, fueled by today’s positive momentum.
But – and this is a big but – if TGT bounces off resistance, we may have a short setup on our hands instead.
It all depends on how things go on Monday. If TGT continues to soar, you won’t hear any more about it from me until another setup forms. But if TGT reverses, I’ll make sure to cover it with some follow-up analysis.
This is one of the most intriguing setups I’ve seen all year, including a series of back-to-back moonshots from Corning Inc. (NYSE: GLW), a stock we looked at a handful of times.
So, keep an eye on TGT over the next few sessions. If share prices keep rising, bulls could be in for a treat. Alternatively, if a reversal occurs, bears will have something to cheer about as well.