Sears Stock Eyes Worst Week Since January

Sears stock has fallen below the $3 level once more

Managing Editor
May 31, 2018 at 10:21 AM
facebook twitter linkedin


One of the latest retailers to step in to the earnings confessional was Sears Holdings Corp (NASDAQ:SHLD). The much-maligned retail giant said it swung to a first-quarter loss, and reported sinking revenue that fell short of expectations. The firm also announced plans to shutter 72 more underperforming stores. In response, SHLD stock is down 11.2% to trade at $2.85 this morning -- one of the worst stocks on the Nasdaq in early trading.

News of a tire partnership with Amazon (AMZN) earlier this month helped Sears shares touch a year-to-date high above $4 and consolidate above the $3 level. Prior to today's results, Sears stock had gained 20% this quarter, guided higher by its 30-day moving average since falling to a record low of $1.99 on Feb. 12. Now, SHLD is on track for its worst week since late January, and has fallen back below the $3 mark. 

Although the stock has found itself on the short-sale restricted (SSR) list today, plenty of short sellers are likely cheering the drop. Short interest increased by 10% in the most recent reporting period, to 14.24 million shares, the most since June. This represents a whopping 51% of SHLD's total available float, and more than four times the average trading pace.

It's no surprise that options traders are equally as bearish, despite limited downside profit potential on a penny stock. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows SHLD with a 10-day put/call volume ratio of 1.38, which ranks in the 73rd percentile of its annual range. 

 

Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!