Both retail stocks received lofty price targets, too
D.A. Davidson can't get enough of retail stocks, saying "the mall is NOT dead." Apparel names Canada Goose Holdings Inc (NYSE:GOOS) and PVH Corp (NYSE:PVH) are higher today, after the brokerage firm initiated coverage on both companies with a "buy" rating and price targets of $68 and $168, respectively. Options are flying off the shelf on the former, while the latter tests a key trendline.
Canada Goose Stock Scaling NYSE
At last check, Canada Goose stock was up 9.4% to trade at $63.37, and one of the best stocks on the New York Stock Exchange (NYSE) today. The new price target is just a chip-shot from the stock's June 20 record high of $68.75. GOOS shares have doubled in 2018, with pullbacks in the past three months neatly contained by their 80-day moving average.
Looking toward options, traders have been extremely bullish in recent weeks. This is per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which shows the retailer with a 10-day call/put volume ratio of 12.77, ranking in the 91st percentile of its annual range. In other words, during the past two weeks, calls have been purchased over puts at a faster-than-usual clip.
Shifting gears to today, nearly 7,700 calls have been traded -- seven times what's typically seen at this point in the day, with volume in the 99th annual percentile. Most active is the October 65 call, but the weekly 10/5 62-strike call is close behind, and it appears that new positions are being opened at both.
Now seems to be an attractive time to purchase short-term GOOS options. This is per it's Schaeffer's Volatility Index (SVI) of 42%, which ranks in the 8th percentile of its annual range. In simpler terms, short-term options are cheap, from a volatility perspective.
PVH Testing Resistance After Bull Note
Looking at PVH, the stock is up 2.1% to trade at $142.99. The shares gapped lower late last month following a dismal quarterly report, but have since rallied to test their 30-day moving average. Overall though, the equity remains 4% above its year-to-date breakeven level.
Short sellers have been ramping up their exposure recently. Short interest more than doubled in the last reporting period, and the 2.56 million shares sold short is the most since December 2015.