The 40 Best and Worst Stocks for Week 5

KORS and FB are among the names to watch next week

Jan 27, 2017 at 2:59 PM
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It's been an interesting start of the year for the stock market, with the major indexes spending much of the first three weeks fairly flat before rallying to a series of record highs earlier this week. As the fourth week of 2017 wraps up, and the broad market takes a breather for the day, we're looking ahead at what week five may have in store. The tables below -- courtesy of Schaeffer's Quantitative Analyst Chris Prybal -- show the best and worst performers on the S&P 500 Index (SPX) during the fifth week of the year, going back to 1972. Topping the lists of best and worst stocks are retailer Michael Kors Holdings Ltd (NYSE:KORS) and social media giant Facebook Inc (NASDAQ:FB).

Best Week 5 Stocks January 27 2Worst Week 5 Stocks January 27

 

KORS has been positive during week five in four of the past five years, averaging a hefty 10.9% gain for the week. The stock is up 7.6% year-over year at $41.68, but has been slumping on the charts since last November. More recently, the stock has spent 2017 stuck below the $43-$44 area, which also caused trouble in late-2015, and was recently rejected by the 30-day moving average amid rumors the company may be considering a bid for sector peer Kate Spade & Co (NYSE:KATE). Just overhead is peak open interest at the February 45 call, which could cause more trouble for the shares as the front-month options expiration approaches.

In fact, KORS options traders have shown an unusual appetite for long calls relative to puts in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the retailer's 10-week call/put volume ratio stands at a top-heavy 5.91 -- in the 80th annual percentile. But with short interest accounting for nearly 8% of the stock's float, it's possible some short sellers have been picking up calls as a hedge. Meanwhile, analysts are less than impressed, with 16 out of 18 calling Michael Kors Holdings Ltd a "hold" or "strong sell."

In contrast, FB has only seen one positive week five return in the past four years, and has averaged a 3% loss over the period. On Thursday, the stock came within a hair of taking out its Oct. 25 record high of $133.50. Today, the shares are lower, last seen down 0.4% at $132.02 -- but with a 14-day Relative Strength Index (RSI) of 73.8 docked firmly in overbought territory, a near-term breather may be in the cards. Longer term, the shares have added 21% over the past 12 months.

Option traders seem to be eyeing more upside, with FB's 10-day call/put volume ratio of 1.93 on the ISE, CBOE, and PHLX seated higher than 79% of the past year's readings. Simply stated, calls have been bought to open over puts at a faster-than-usual clip. Analysts largely agree -- roughly 91% of the brokerage firms tracking Facebook Inc maintain a "buy" or better rating, while not one gives it a "sell." Meanwhile, the company is due to report earnings after the close next Wednesday, and has moved higher in the session after reporting in five of the eight most recent quarters, averaging a sizeable 5.1% swing in either direction. Nevertheless, FB shares plunged 5.1% in the session subsequent to reporting in November.

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