Apparel stocks DKS, TJX, and M are in focus after September retail sales beat estimates
For the second-straight month, retail sales exceeded estimates. However, SPDR S&P Retail ETF (XRT) is lower by 0.4% at last check after opening the session higher. Three sector stalwarts -- with an emphasis on apparel -- are reacting in a variety of ways, and worth a closer look.
DKS Could Burn Short Sellers
Dick's Sporting Goods Inc (NYSE:DKS) stock is holding steady, up 1.6% to trade at $216.18. DKS is up 47% in 2024 but is roughly 10% off its Aug. 23 highs. The upside: there's support in place at the shares' 200-day moving average.
There's also short squeeze potential. Short interest fell by nearly 19% in the two most recent reporting periods, yet the 4.21 million shares sold short accounts for a healthy 7.6% of DKS' total available float. At the stock's average pace of trading, it would take shorts more than four trading days to buy back their bearish bets.
TJX Options Bears Pile On
TJX Companies Inc (NYSE:TJX) is flat, last seen trading at $117.44. The shares are 25.2% higher year-to-date, but have taken a 3% haircut off their Aug. 28 record high of $121.13. This pullback has found support at its ascending 100-day moving average.
Short-term traders are more put-skewed than usual, with the security's Schaeffer's put/call open interest ratio (SOIR) of 1.02 ranking in the 80th percentile of its annual range. This indicates that near-term put open interest outweighs call open interest by a wider-than-usual margin right now.
Analysts Skeptical of M Despite Rally
Macy's Inc (NYSE:M) stock is off by 0.5% to trade at $16.18, adding to its 19.6% year-to-date deficit. Although M bounced off its Sept. 11, 11-month low of $14.07, the shares are testing their 80-day moving average today.
If the equity can clear this trendline, analysts may adjust their stance; eight of the 11 in coverage maintain "hold" or "strong sell" ratings.