I'm specifically focusing on some of the more extended department stores such as Kohl's (NYSE:KSS), Federated (FD) and JC Penney (NYSE:JCP), as well as select teen retailers like American Eagle (AEOS).
Kohl's has been on fire this year, nearing its all-time high of $77.75 set back in 2002. In fact, the stock is up over 50% on the year, and has gone nearly straight up since breaking through its trading range this summer.
Still, the stock's been struggling as of late, falling from its high of $73.97 set a few weeks ago. In November, the company reported November comps that were at the high end of the company's guidance, but below many analyst estimates. In a press release, Larry Montgomery, Chairman and CEO, said he was pleased with the performance over the Thanksgiving weekend, but his words of comfort haven't stopped the stock's slide.
Even a recent upgrade from Matrix Research has failed to prop up the stock as it continues to show weakness.
With the stock now below its 50-day moving average, I'm watching to see if it can hold its most recent closing low of $69.09. If that level fails to hold, watch for continued weakness through the holiday season.
KSS 1-yr chart
Disclosure: Author own a small number of KSS puts and will be looking to add others in the sector.