Macy's Stock Hits 2-Year Low Before Earnings

Options traders are optimistic ahead of the event

Digital Content Manager
May 30, 2023 at 3:15 PM
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Macy's Inc (NYSE:M) will join its retail sector peers in the earnings confessional later this week, with its first-quarter earnings report due before the open on Thursday, June 1. The stock is down 1.8% at $14.08 at last check, and earlier slipped to a two-year low of $13.96, after at least two rallies ran into resistance at the $16 level this month. Year-to-date, the security is off 31.9%, with overhead pressure at the 40-day moving average guiding it lower since March.

M 40 Day

The equity boasts a strong post-earnings track record, however. In fact, Macy's stock  finished six of the last eight eight next-day sessions higher, including a 21.2% pop back in November 2021. Over the last two years, M averaged a move of 11.9%, regardless of direction, but the options pits are pricing in a bigger-than-usual swing of 18.4% this time around.   

The options pits lean optimistic. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day call/put volume ratio of 2.98 sits in the 93rd percentile of its annual range, indicating these traders have rarely been more put biased. 

Though short interest is already declining -- down 3.6% in the most recent reporting period -- shorts remain firmly in control. The 20.97 million shares sold short make up 7.8% of M's available float.

 

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