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The holiday shopping wars have a new wrinkle

Two retail giants are going to be handling the holiday season in very different ways.

With a little more than a month to go before Christmas shopping kicks in, Target is offering free shipping until Dec.20 for its online orders. That's quite a difference from Amazon, which has a $35 minimum before its customers qualify for free shipping on millions of its items.

(Watch: Target offers free shipping on all holiday items)

Both Target and Amazon have one thing in common: Their stocks are down for the year. Target shares have lost 2 percent so far in 2014 while Amazon's stock has tumbled 21 percent year-to-date.

Part of that may be due to how they run their businesses. Target has had a 4.6 percent operation margin over the last 12 reported months while Amazon's operating margin is at a razor-thin 0.9 percent. David Seaburg, head of equity sales trading at Cowen and Company, believes Amazon has to mind its expenses, especially in light of Thursday's disappointing earnings report.

"Amazon can't afford to squeeze margins anymore," Seaburgsaid. "Investors are very critical of them for how low their margins are versus competitors. Though small numbers, every little bit helps."

Meanwhile, Target's free shipping policy may have dangers for that company as well, according to Gina Sanchez, founder of Chantico Global.

"It's a total promotional marketing cost that they have to absorb somewhere else," warns Sanchez, a CNBC contributor. "People will buy one-off items that cost more to ship than they make in the purchase of whatever the item is – like toilet paper."

With shares trading at 17 times forward expected earnings, Target is an expensive stock, Sanchez said.

"It's really hard to get excited about Target here," she said. "I'm not sure they're going to be able to get enough earnings to cover the cost they are going incur over the holiday season. So I really don't see this [free shipping] as a great move."

The short-term chart may show some positive signs but technical strategist Richard Ross isn't particularly enthusiastic about Target shares.

(See: CNBC's Retail coverage)

"The stock has been a real disappointment along with consumer discretionary stocks this year," said Ross, a "Talking Numbers" contributor. "But there are some reasons for optimism in the chart."

According to Ross' charts, after forming a bullish double-bottom pattern earlier in the year around the $55 level, Target shares moved up along an uptrend. It recently moved above its 200-day moving average and is now facing key resistance at $65.

"A breakout above $65, that would establish a confirmed base-breakout which really sets the stage for a potential retest of those highs back around $75," said Ross. "But absent that sort of breakout, it's very difficult to get too excited about Target given the fundamental headwinds."

Note: This story was edited to clarify Amazon's free shipping policy.

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