New Highs Could Be On The Horizon For This Retail Stock

TPR is trading near a multi-year high with low implied volatilities

by Patrick Martin

Published on Mar 19, 2018 at 11:57 AM
Updated on Jun 24, 2020 at 10:16 AM

Tapestry Inc (NYSE:TPR) stock has been on a tear lately, racing to a four-year high of $53.50 last Tuesday. If past is precedent, shares of the retail name -- which changed its name from Coach after its purchase of Kate Spade in October -- could be gearing up for their next leg higher in the coming months. 

In today's trading, Tapestry stock is up 0.3% today to trade at $52.90 -- showing resilience in the face of stiff broad-market headwinds -- and has tacked on 19% in 2018 alone. Plus, the security hit a four-year high of $53.40 last Tuesday, March 13. The shares have been guided higher by their rising 20-day moving average since late November, and are riding a six-week winning streak. 

What's more, TPR popped up on a list compiled by Schaeffer's Senior Quantitative Analyst Rocky White of stocks trading near their 52-week high, and sporting unusually low volatility expectations, measured by our Schaeffer's Volatility Index (SVI). Tapestry's current SVI of 20% ranks in the low 4th percentile, suggesting it could be a good time to target near-term options contracts.

What's more, the last time the shares flashed a similar signal -- looking at data since 2008 --  TPR was up 7.83% one month later. A move of similar magnitude would put the stock near $57 for the first time since December 2013, based on its current perch.

A round of analyst upgrades could certainly help keep the wind at the retail stock's back. One-third of the brokerages covering TPR rate it a "hold" or "strong sell."


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