Options bulls are circling the stock before a historically positive holiday week
The shares of athletic apparel retailer Foot Locker, Inc. (NYSE:FL) on Wednesday climbed atop their 10-day and 30-day moving averages for the first time since Jan. 29, when the stock was flirting with six-month highs. FL stock has soared more than 50% in the past three months alone, and could outperform next week, if recent history is any indicator.
Not only is Foot Locker stock typically among the best to own in February, averaging a monthly gain of 5.61% over the past 10 years -- it's also among the best stocks of Presidents Day week, historically. Per data from Schaeffer's Senior Quantitative Analyst Rocky White, FL has ended the holiday-shortened week higher eight of the past 10 years, averaging a healthy gain of 2.33%.
At last check, the retail stock was up 0.1% to trade at $48.63, set for a fifth straight day of gains and a second consecutive close atop the aforementioned 10- and 30-day trendlines. The security kicked off the month with a pullback, dropping with the broader equities market, but found support in the $44-$46 neighborhood, which acted as a foothold before FL stock's August bear gap.
Recent options traders have been rolling the dice on more upside for the shares. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open more than seven FL calls for every put in the past two weeks. The 10-day call/put volume ratio of 7.13 is in the 97th percentile of its annual range, underscoring the healthier-than-usual appetite for bullish bets over bearish of late.
Foot Locker stock has rewarded premium buyers over the past year. The stock's Schaeffer's Volatility Scorecard (SVS) stands at a lofty 93 out of 100, indicating the shares have handily exceeded options traders' volatility expectations in the past 12 months.
Despite FL's ascent over the past few months, there's still plenty of room on the bullish bandwagon, as far as analysts are concerned. While Cowen recently told traders to buy the dip on Foot Locker stock, nine of 19 brokerage firms following the equity maintain tepid "hold" or "sell" ratings. A round of upgrades could help FL resume its quest for year-to-date highs.