FRAN and GPS options traders have been targeting calls lately
Retail stocks have been on the move recently -- and mostly to the downside, with brick-and-mortars succumbing to competitive pressures from e-tailers. Two retail stocks swinging wildly today are
Francesca's Holdings Corp (NASDAQ:FRAN) and
Gap Inc (NYSE:GPS). Digging deeper, both FRAN stock and GPS stock are also trading near key Fibonacci retracement levels, which we'll explore in-depth below.
FRAN Breaks Out on Earnings
FRAN is on fire today, adding nearly 12% at the open and last seen 2.1% higher at $15.86 following an
earnings beat. In fact, at the stock's intraday high, it was just a chip-shot from the 38.2% retracement of its June-to-December rally. However, the shares have yet to overtake that level, and it appears they're now grasping for a foothold at the 50% retracement of the same time frame, which would bode well for FRAN's future, technically speaking.
Options traders are likely welcoming today's bullish price action. FRAN stock sports a 20-day call/put volume ratio of 3.91 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), with long calls nearly quadrupling puts.
GPS in a Dangerous Spot
GPS has been in a world of hurt. The retail stock is down 4% at $22.53, and has now shed nearly 6% week-to-date. Boding especially poorly, the shares have decisively breached the 50% retracement of their May-to-November burst higher, and could once more be headed back down to the 61.8% Fibonacci level.
Call buying has been popular among GPS options traders. The shares sport a 10-day ISE/CBOE/PHLX call/put volume ratio of 1.89, in the bullishly skewed 82nd annual percentile. However, given that 10% of the security's total float is sold short -- which would take a week to cover at GPS stock's typical trading rate -- it's perhaps more likely that short sellers are purchasing calls as upside insurance.
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