Shares of J.C. Penney Co. Inc. (NYSE: JCP) closed at $12.80 last night, after setting a new 52-week low of $12.50 during the day. Its shares have not traded at that price since January 2001.
Options traders on Tuesday bought puts at $13.50 before the shares closed at $13.28 Tuesday night. Some $15 puts were presumably rolled over at an even lower price. CNBC reported yesterday that a big options trade for 10,000 September 10th puts makes money if J.C. Penney’s stock falls below $9.41. Another big trade bet that the stock will hold above $12 a share for the next 10 days. Who is right?
History — and technical analysis — would indicate that once a stock that has been falling for nearly two years breaks through a multiyear low, that stock will continue downward until it finds its next floor. For J.C. Penney, that level is below $10 a share, in the neighborhood of $7 a share. That is really ugly for a stock that traded above $42 only 18 months ago.
Nothing seems to be able to stop the fall. The company fired its CEO, both Bill Ackman and George Soros have pumped money in and a new chief marketing officer was named — nothing seems to help.
Some 18.5% of the company’s shares were held short as of July 24, when the shares closed just under $16. The shorts are highly likely to be higher when short interest is reported again after markets close tomorrow night.
J.C. Penney shares are trading down 0.6% this morning, at $12.72 in a 52-week range of $12.50 to $32.55.
No Commission Fees, No Minimums, No Velvet Ropes. (Sponsored)
Robinhood revolutionized commission free investing, and it continues to do so today. With a few simple taps you can trade stocks like Nvidia and Amazon, market beating mutual funds, and trade options with Robinhood Financial. FDIC insurance coverage is just another benefit.
And, you can buy and sell cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Dogecoin (DOGE) with Robinhood Crypto.
Sign up today — click here to start your journey.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.