Sears Stock Soaring on Another Amazon Expansion

Griffon stock is staring at its worst loss since October 2008

by Emma Duncan

Published on Jun 12, 2018 at 3:13 PM
Updated on Jun 24, 2020 at 10:16 AM

U.S. stocks are trading mixed this afternoon, with the Dow slightly in the red, as investors prepare for tomorrow's Fed announcement. Some individual stocks making big moves today include department store concern Sears Holdings Corp (NASDAQ:SHLD), home retailer RH (NYSE:RH), and home & building product supplier Griffon Corporation (NYSE:GFF). Below, we will take a closer look at how shares of SHLD, RH, and GFF are trading on the charts.

Sears Expects to Add 71 More Amazon Tire Service Locations

Shares of SHLD are up 6.6% at $2.57, at last check, after the company announced yet another expansion of its partnership with Amazon (AMZN). The expansion will allow the department store's Amazon-bought tire installation service to be added to 71 more locations, upping the total count to 118. The bounce is a welcome change of pace for Sears stock, as the long-term underperformer has shed 63.4% over the past 12 months, with recent rebound attempts checked by its 160-day moving average.

In the options pits, 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 1.76 -- in the 80th annual percentile. This ratio suggests Sears puts have been purchased over calls at a faster-than-usual clip during the past two weeks. This is especially interesting considering the limited downside potential of bought puts on a penny stock.

Sears stock has also been heavily shorted, as short interest rose 12.6% during the past two reporting periods, and now accounts for 51% of SHLD's total available float. At the retailer's average daily trading volume, it would take about a week for shorts to buy back their bearish bets.

RH Gapping Higher on Outstanding Earnings

RH has gapped higher following an impressive first-quarter earnings beat and strong forecast. Up 33% at $158.30, at last check, RH stock is fresh off a record high of $164.49. Today's feat now has the shares up 202% year-over-year, with recent support coming from the 30-day moving average. 

RH is also heavily shorted, as short interest represents 42.7% of the equity's total float. It would take these bears more than 11 sessions to buy back their shorted shares, going by average daily volumes. However, short interest has been declining in recent weeks, including a 2% drop in the last two reporting periods. In other words, upside momentum could be augmented by an extended exit of short sellers.

Looking at options data, RH stock's Schaeffer's put/call open interest ratio (SOIR) of 0.48 ranks in the lowest percentile of its annual range. In other words, options traders are more call-heavy than usual, looking at contracts set to expire in three months or less.

Griffon Stock Plunges on GS Direct Plan to Divest Shares

GFF is the biggest loser on the New York Stock Exchange (NYSE), on news that Goldman Sachs (GS) affiliate GS Direct will divest its remaining GFF holdings through a public stock offering. In response, GFF earlier fell below the $20 level, and was last seen 12% lower at $20.25. Griffon stock is now staring at its worst loss since October 2008.

Meanwhile, GFF -- on the short-sale restricted (SSR) list -- has seen nearly 250 puts change hands today, compared to an average daily put volume of zero. Nearly all of the action has transpired at the June 20 put, though it's unclear whether the contracts are being bought or sold to open.


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