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Today, we’re opening a new bearish trade on Macy’s, Inc. (NYSE:M).
News that was not as bad as expected was reported by Kohl’s (NYSE:KSS) and Nordstrom (NYSE:JWN) on Wednesday, which had a generally positive effect on department stores overall.
However, we don’t think this applies to the entire sector, and industry-wide data show that this part of retail is likely to be the weak spot in this season’s earnings.
We anticipate that Macy’s will hold below its resistance range and give up Wednesday’s gains in the short term.
This is a riskier-than-average trade, but a break of $24 per share should send the stock to $22 in the near term, which makes the risk/reward much more attractive.
‘Buy to open’ the M February 25 Put (M180216P00025000) for a maximum price of $1.05.
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