Middling Macy's Stock Could Be a Good Pick for Options Bears

Macy's has been trading sideways for most of 2022

Digital Content Manager
Apr 12, 2022 at 12:37 PM
facebook twitter linkedin


Since their November selloff, the shares of Macy's Inc (NYSE:M) have failed to make much noise on the charts. The equity has been consolidating below the $28 level for all of 2022, with the $23 mark lingering as a floor for pullbacks. In fact, M is attempting yet another bounce off this level, though it ran right into a historically bearish trendline that could keep the equity from staging a breakout of this holding pattern any time soon. 

According to a study from Schaeffer's Senior Quantitative Analyst Rocky White, Macy's stock just came within 2% of its 80-day moving average.  This study shows five similar occurrences over the past three years. The stock was lower one month after each of these signals, averaging a 9.8% drop. From its current perch at $25.20, a similar drop would put M at $22.73, just below its aforementioned floor at the $23 level. 

m april 12

The stock looks ripe for bear notes, as its 12-month consensus price target of $31.77 is a 25.8% premium to current levels. Plus, four of the 17 analysts in coverage call M a "strong buy," compared to eight "hold" ratings, and five "sells."

Now might be an ideal time to speculate on the stock's next move with options. M sports a Schaeffer's Volatility index (SVI) of 58%, which stands higher than 26% of readings from the past 12 months. In other words, options traders are pricing in relatively low volatility expectations at the moment. 

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners