Five Below Stock Plunges on Rare Bear Note

Options traders have been call-heavy toward FIVE over the past 10 weeks

Managing Editor
Jul 20, 2018 at 9:48 AM
facebook twitter linkedin


Shares of Five Below Inc (NASDAQ:FIVE) are lower in early trading, after Credit Suisse downgraded the bargain retailer to "neutral" from "outperform." The brokerage firm cited a balanced risk/reward profile, and said it sees the "material outperformance and back-half comp acceleration" now priced into the shares. FIVE is down 2.8% at $204.91, at last check.

More broadly, Five Below stock has been a long-term outperformer on the charts, up more than 125% over the past 12 months. Most recently, FIVE bounced off its rising 80-day moving average in early June, thanks to a post-earnings surge that put the shares on their path to yesterday's record peak of $109.09.

Pessimistic analyst attention is rare for Five Below stock, with eight of the 12 firms in coverage sporting "buy" or "strong buy" ratings. Worth noting, however, is FIVE's average 12-month price target of $102.56 -- which sits at a slight discount to current levels.

Digging into options, data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows FIVE stock's 10-day call/put volume ratio of 3.41 in the 89th percentile of its annual range. This suggests calls have been purchased over puts at a faster-than-usual clip during the past two weeks.

Lastly, short interest on FIVE fell nearly 10% during the past two reporting periods, and now represents 9.9% of the stock's total available float. At the FIVE's average daily trading volume, it would take nearly a week for shorts to buy back their bearish bets.

 

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