Pre-Earnings Bulls Blitz Rite Aid (RAD) Amid SSS Burst

Rite Aid Corporation (RAD) hit its loftiest perch in 13 years earlier

Apr 2, 2015 at 11:08 AM
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Same-store-sales (SSS) results are hitting the Street today, and shares of Rite Aid Corporation (NYSE:RAD) are making a run for multi-year highs in the wake of a strong report. Meanwhile, in the equity's options pits, calls are crossing the tape at two times what's typically seen at this point in the day, and are outpacing puts by a 14-to-1 margin.

Drilling down, the stock's April 9 call has received notable attention once again, and it appears as if some of the activity could be of the buy-to-open kind. If speculators are indeed initiating new long positions here, the goal is for RAD to rally north of $9 -- and into territory not charted since July 2001 -- by the close on Friday, April 17, when front-month options expire.

Today's accelerated call activity just echoes the withstanding trend, as RAD's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 13.25 ranks in the 96th annual percentile. With the company slated to take its turn in the earnings confessional next week, those currently purchasing short-term premium on the security are willing to pay inflated prices. Specifically, RAD's Schaeffer's Volatility Index (SVI) of 81% rests higher than 94% of similar readings taken in the past year.

Technically speaking, the stock has been a standout. Thanks to today's 5% burst that has RAD trading near $9.00 -- after earlier hitting a 13-year high of $9.02 -- the equity has added an impressive 20% year-to-date. Additionally, Rite Aid Corporation (NYSE:RAD) has outperformed the broader S&P 500 Index (SPX) by nearly 14 percentage points over the past month.

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