After a 3-month short squeeze and bogus restructuring news releases, Sears Holdings (SHLD) is once again showing weakness. With major players Walmart, Target and Amazon.com showing strong sales, Sears and Best Buy have been getting clobbered.
Sears Holdings (SHLD) July 2012 $52.50 Puts (2) @ 7.25
After a 3-month short squeeze and bogus restructuring news releases, Sears Holdings (SHLD) is once again showing weakness. With major players Walmart, Target and Amazon.com showing strong sales, Sears and Best Buy have been getting clobbered. Although the short trade on SHLD is already quite popular, there is no denying Sears is the “Research in Motion” of the department store space – losing despite restructuring and store overhauls.
The chart displays the classic bearish Christmas tree pattern. Worse yet, Sears (SHLD) has broken down below $50.50, a key Fibonacci technical level. Based on this technical breakdown Sears has the potential for 10-20% downside in the short term. Our short term target for SHLD is $43.00, representing nearly 12% of downside.
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