2 Red-Hot Retail Stocks Hitting 2017 Highs

By Emma Duncan / November 17, 2017 / www.schaeffersresearch.com / Article Link

U.S. stocks are trading mixed this afternoon,amid concerns about Republican tax reform plans. Among the stocks making big movesare clothing retailers Abercrombie & Fitch Co. (NYSE:ANF) and Gap Inc (NYSE:GPS), and Greek shipping concern Diana Containerships Inc (NASDAQ:DCIX). Here's a quick look at what's moving shares of ANF, GPS, and DCIX.

ANF Leads NYSE After Earnings, Solid Hollister Sales

Abercrombie & Fitch stock is at the top of NYSE, in response to the retailer's third-quarter earnings beat and solid sales from Hollister. ANF stock was last seen trading up 23% at $15.38, and just off a fresh year-to-date high of $16.18.

Ahead of earnings, Abercrombie options traders were showing optimism. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows ANF with a 10-day call/put volume ratio of 1.93, which ranks in the 96th percentile of its annual range. This suggests that calls have been bought to open over puts at a faster-than-usual clip during the past two weeks.

Gap Rallies on Third-Quarter Beat and Boosted Guidance

Shares of Gap are also trading near the top of NYSE, following the retailer's third-quarter beat and upwardly revised full-year guidance. The stock was last seen up 7% at $29.30, just off a year-to-date high of $30.14. GPS is now up 31%for 2017.

An exodus of options bears could further lift Gap stock. The equity's Schaeffer's put/call open interest ratio (SOIR) of 4.42 is higher than 95% of all other readings from the past year, indicating near-term traders are more put-heavy than usual right now.

DCIX Moves to Top of Nasdaq After Earnings, Shipping Rally

Diana Containerships stock is at the top of Nasdaq,after the firm reported a narrower-than-expected third-quarter loss. In addition, DCIX is riding sector tailwinds, with shipping stocks higher in step with drybulk shipping rates, as measured by the Baltic Dry Index. The shipping stock was last seen up 52% at $10.03, and earlier rallied as high as $17.36 -- nearly tripling from yesterday's close.

What's more, the stock's average 12-month price-target of $6.16 now sits at a steep discount to DCIX stock's current perch. A round of price-target hikes from analysts could help the shipping stock even higher.

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