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J. C. Penney Company, Inc (NYSE: JCP) opened at $71.20. So far today the stock has hit a low of $70.55 and a high of $71.60. As of 10:55, JCP is trading at 70.78, down 1.74 (-2.4%).After hitting a one year high of 87.18 in February, the stock has stumbled recently, finding some support at the 70 line last month. Competitor Sears (NASDAQ: SHLD) lowered their earnings guidance this morning, dropping shares nearly 7% and dragging other retail stocks down with it. Recent technical indicators for JCP have been bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.
For a bearish hedged play on this stock, I would consider a November bear-call credit spread above the $90 range. JCP has never been above $90 and has shown resistance around $84 recently. This trade could be risky if the company's earnings (due out in late August) are a positive surprise, but even if that happens, this stock could have trouble getting over $85, where it has seen some serious resistance over the past 6 months.
Brent Archer is an options analyst and writer at Investors Observer. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You When To Dump A Stock.
DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in SHLD or JCP.
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