5MRD

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 X logo 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.

 

The $25K Day Trading Barrier is Gone

The long-standing Pattern Day Trader (PDT) rule that required many traders to maintain a $25,000 account balance is no longer standing in the way.

That means more traders can actively pursue short-term opportunities without the barrier that kept so many on the sidelines.

Now it's all about having the right strategy.

Dynamite Day Trading Signals helps you hit the ground running with up 2 options trade alerts per week, built to capture fast-moving opportunities.  

👉 Sign up now to receive the next trade

MR content page
 
 
 
 

Follow us on X, Follow us on Twitter