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J.C Penny (JCP) Oversold Bounce?

My Humble Self Awarness

Yes, I admit it as a professional trader it is questionable for me to even think about the unthinkable. J.C. Penny lets face it is a company showing massive distribution and has on going concern issues. If you do not see you have no business trading this or any other stock! That being said let’s dare risk even thinking about an oversold bounce.

JC Penny Historical Support

Thank being said is there a trade to be had here? Will J.C. Penny see an oversold bounce off of historic lows? My guess is yes because we are closing in on lows last seen in 2001 when the stock bottomed out at $7.15 per share. Very similar chart indeed. The difference besides Bill Ackman not losing his shirt? It’s called the internet. Back in 2001 it was a task getting consumers to provide credit card information. Now, it is the way we live our lives. Just ask Jeff Bezos at Amazon.com.

The JCP Bounce & Risk

Were we to make a trade in (JCP) the trade would be with options. There is no way on earth I am going to risk alot of money buying up the common shares with the hope that I don’t wake up one morning and (JCP) has it’s attorneys filing for bankruptcy protection from creditors. I am purposely trying to paint a dire picture here. If you trade this stock yes, you can make alot of money but the money you dedicate to this trade must be speculative dollars that you must assume will be lost. The plan is to use call options.

 

JC Penny Short Interest

Although there are nearly 47% of the  float short as of September 15th the number of those share relative to the average daily volume provides for a 2.5 day short covering rally. What is the take away from this data point? The money is made on the buy of the call options. Pay the ask  on a opening spike and you already lost. I will be going over the strategy with members in Focus Stocks Video to members later today.

Share Statistics
Avg Vol (3 month)3: 29,373,000
Avg Vol (10 day)3: 92,379,600
Shares Outstanding5: 220.56M
Float: 147.71M
% Held by Insiders1: 12.42%
% Held by Institutions1: 108.90%
Shares Short (as of Sep 13, 2013)3: 71.72M
Short Ratio (as of Sep 13, 2013)3: 2.50
Short % of Float (as of Sep 13, 2013)3: 46.90%
Shares Short (prior month)3: 66.89M

 

 

I will be going over the charts with Premium Members in my Focus Stocks Video set to be released later today. Lock in at the old rate before prices go up when the current site is complete. The link below is for a 14 Day Free Trial at the Monthly rate of $29.95. I do give discounts for Quarterly and Annual rates just send me an email at Robert@thecontrariantrader.com

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Monthly Chart of J.C. Penny (JCP)

Monthly Chart of J.C. Penny (JCP)

 

 

 

 

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