Target and Lowe’s earnings are on tap this week. Experts say one big-box retailer is the better bet 

Retail earnings are in full swing, and this week it's Lowe's and Target's turn as two of the big-box retailers report on their recent quarters.

The two retailers have had very different years. While Target has surged 27 percent since the beginning of 2018, Lowe's is up 6 percent and trailing the XRT retail ETF's 14 percent gain.

Market watchers agree on one thing ahead of their earnings: Target still looks like the better bet.

"I'm rolling with the momentum and I'd be a buyer of Target ahead of the earnings," said Craig Johnson, chief market technician at Piper Jaffray, on CNBC's "Trading Nation" on Friday.

Target shares are coming off their eighth week in the green, a stretch not seen since April 2013. The stock has added 14 percent since the beginning of June.

"When you look at the options' implied move, it's about 6 percent and, from our perspective, a move above $85 in Target is also going to be a nice technical resistance level to break through and would represent about a three-year new high in the stock," said Johnson.

Target has not traded above $85 since July 2015. Its shares are just 2 percent from that level.

Its fundamentals story also looks solid to Gina Sanchez, CEO of Chantico Global.

"The question is, do you buy a catch-up story that's really kind of a good stock that's made real changes, changing their same-day delivery, and forging into the e-tailing space and that's starting to pay off (that's Target) versus an average story in a booming sector?" Sanchez said Friday on "Trading Nation."

Target has aggressively expanded its same-day delivery options in metro areas over the summer, looking to compete with the same services offered by Amazon. It most recently expanded to Portland, Maine.

"Target's fundamentals story is the story of a company that's actually doing things and getting rewarded for them so I still think there's more to move," added Sanchez.

Target and Lowe's are scheduled to report earnings before the bell Wednesday.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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