Retail Stocks to Mix and Match: Kohl’s (KSS)
Kohl’s was the other retail stock responsible for screams and dire warnings of a “retail recession” in yesterday’s trading session. Like Macy’s, Kohl’s holiday numbers were disappointing and resulted in the company slashing guidance.
Unlike M stock, my view is that KSS isn’t in the bargain bin just yet. Aside from how Kohl’s simply isn’t the brand Macy’s is, this retail stock doesn’t offer anything new to investors, other than a convenient place to shop. And that, of course, obviously isn’t working.
Further — and despite being off around 19% Thursday — KSS stock is warning of lower prices ahead. A bearish gap below its 200-day simple moving average and 62% Fibonacci support suggests the May low is in play for bearish investors.
Reviewing the KSS options board, the February $42.50/$37.50/$32.50 put butterfly is attractive given what’s been said.
Priced for $1.15, the spread maintains a nice-sized expiration profit range from $33.65 to $41.35. The profit area capitalizes on anticipated downside pressure for this retail stock, while allowing a bearish investor to position with limited risk and vastly reduced capital commitment.