NEW BULLISH Plays
J.C.Penney Co. - JCP - close: 9.40 change: +0.18
Stop Loss: 8.75
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Entry on April -- at $---.--
Listed on April 13, 2015
Time Frame: Exit PRIOR to earnings in mid May
Average Daily Volume = 14.2 million
New Positions: Yes, see below
Why We Like It:
It's been two years since retail guru Ron Johnson almost killed department store giant JCP. It was April 2013 when the board finally ousted their new CEO and asked the previous CEO to return. It's been a long, slow turnaround but analysts are turning optimistic.
If you're not familiar with the company, "J. C. Penney Company, Inc. (JCP), one of the nation's largest apparel and home furnishing retailers, is dedicated to fitting the diversity of America with unparalleled style, quality and value. Across approximately 1,060 stores and at jcpenney.com, customers will discover a broad assortment of national, private and exclusive brands to fit all shapes, sizes, colors and wallets."
JCP's most recent earnings report was February 26th. The company reported Q4 earnings of $0.00. That was worse than expected but revenues were up +2.9% to $3.89 billion, just a hair above expectations. Q4 comparable store sales were above estimates at +4.4%.
Since this earnings report a couple of analysts have turned bullish on the stock. JPM recently raised their price target from $8 to $10. An analyst with Piper Jaffray made waves when they raised their price target from $13 to $14. Wall Street is hopeful that now spring is here the weather will not hamper consumer spending. These price target upgrades have helped spark some short covering.
Technically JCP has broken through resistance near its 200-dma, the $8.50 area and its February high. The most recent data listed short interest at 33% of the 291.7 million share float. That's plenty of fuel for another short squeeze higher.
Tonight we are suggesting a trigger to launch bullish positions at $9.51. We'll plan on exiting prior to JCP's earnings in mid May (no date set yet).
Trigger @ $9.51
- Suggested Positions -
Buy JCP stock @ $9.51
- (or for more adventurous traders, try this option) -
Buy the MAY $9 CALL (JCP150515C9) current ask $0.78
option price is a current quote and not a suggested entry price.
Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.
Option Format: symbol-year-month-day-call-strike