Shares of Target were on a hot streak, but they slumped Tuesday after a Halloween costume scare that erupted at a time when customers have been cutting spending.

It was all going well for Target investors through the closing bell on Monday. The stock was up 73% on the year and closed at $169.89, its highest level since April 2024.

That now looks like it could be stock's top. Shares dropped as low as 3.8% to $163.40 in midday trading Tuesday amid a wider decline of many other retailer stocks.

Shares of retail giant Walmart fell 1.6% on the heels of its recent earnings report, which revealed decelerating U.S. comparable sales. Consumers are spending less as gas prices stay higher and the macroeconomic environment continues to weaken.

Sports and footwear stocks were also getting hammered Tuesday, with Dick's Sporting Goods sinking 28% after the the company cut its full-year profit forecast as earnings missed expectations. Nike fell 3.6%, Under Armour declined 2.9%, Academy Sports & Outdoors dropped 4.6%, and On Holding was down 2.7%.

Aside from the general weakness in the sector, on Monday Target apologized and pulled from sale a Halloween clown costume that critics said evoked blackface and minstrel shows.

"We know this is especially hurtful for our Black guests, team members and partners," a Target spokesperson told Barron's. "Removing the costume is an important first step, and the company is looking closely at how this happened and what needs to change to ensure this won't happen again."

It's not the first time a retailer has been called out by consumers who don't like advertisements, messaging, or products. Cracker Barrel Old Country Store and Anheuser-Busch have both dealt with similar backlashes in recent years.

From a strictly financial perspective, Target is in an enviable position as the the company's turnaround continues. On Aug. 19, the retailer raised its fiscal-year outlook for a second time this year. Same-store sales increased 3.8% in the second quarter and management noted that "strength in traffic remains the most encouraging takeaway."

But the stock might have hit a wall on Monday at the $169.89 level. A few technical signs point to shares taking a breather for now. On Tuesday the stock was about 15% above its 50-day moving average, at the $142.20 level, and 37% above its 200-day moving average, around the $119.50 price level. With shares extended above these two key technical levels, investors might be waiting for the stock to move sideways, giving time for the moving averages to catch up.

The reason for this is Target stock has been on something of a roll. It was up 13% this month, even with the decline Tuesday, and it has advanced 70% over the past 12 months. Even so, shares remain about 39% below their record closing high of $266.39 from Nov. 16, 2021.

Based on chart analysis, Target's current rally shares traits with its strong run from April 2020 to July 2021, when shares surged 138%. Between July 2021 and April 2022, the stock then traded sideways before sinking more than 29% in May 2022.

That analysis seems to suggest that the stock might take a similar route now to allow moving averages to catch up. Wall Street doesn't seem to think there's much more current upside in Target. Of the 43 analysts polled by FactSet, Target has an average Hold rating with a price target of $164.58.

The question now is whether investors are simply taking profits and waiting for key moving averages or if this is part of a broader retailer selloff.