Kohl's Corporation (KSS) Hits New High, Calls Explode

Kohl's Corporation's (KSS) options pits see increased activity following a promising same-store-sales report


Published on Feb 4, 2015 at 3:33 PM
Updated on Apr 20, 2015 at 5:32 PM

Kohl's Corporation (NYSE:KSS) touched a seven-year high of $67.15 earlier, and was last seen 6.5% higher at $67.00, after posting better-than-expected fourth-quarter same-store sales, and boosting its full-year profit outlook. In response, options bulls have stepped up, with calls crossing at six times the typical intraday pace.

Sliding right in, the strike seeing the most action is the March 67.50 call. Signs point to mostly buy-to-open activity here, with traders hoping for KSS to extend its search for higher highs before the options expire on Friday, March 20.

Today's call buying is just more of the same from the equity's speculators. KSS' 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 0.93 outranks 95% of all other readings from the past year. Some of this activity, though, can likely be attributed to short sellers looking for a hedge. Over 12% of the stock's float is sold short, representing nearly two weeks' worth of pent-up buying demand, at its typical daily volumes.

For the most part, the analyst club is in favor of KSS, with 69% of brokerage firms calling the stock a "strong buy." However, if its technical strength continues, the security could be in line for price-target hikes, as it's already surpassed its average 12-month price target of $62.21. In fact, KSS saw its price target raised by Baird (to $70), Deutsche Bank (to $66), and Sterne Agee (to $71) just today.

On the charts, Kohl's Corporation (NYSE:KSS) has been brilliant. Since hitting a late-October low of $53.86, the shares have tacked on 24.4%.

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