Kohl's Stock Could Catch a Lift Next Week

The stock tends to outperform the week of Black Friday

Kohl's Corporation (NYSE:KSS) stock is slightly lower today. However, the retail stock could rally to new heights in the short term, if recent history is any indicator. Specifically, KSS has been one of the best stocks to own during Thanksgiving week, looking back 10 years, and next week's earnings release could be the catalyst to send the equity higher.

KSS has already gained more than 88% in the past year, with pullbacks contained by its 120-day and 160-day moving average. The shares touched a record peak of $83.28 earlier this week, but have since pulled back to trade around $79.60.

As alluded to earlier, Kohl's stock has been higher the week of Thanksgiving 90% of the time in the past decade, with the equity averaging a gain of 3.45%, per data from Schaeffer's Senior Quantitative Analyst Rocky White. The retailer also has a date in the earnings confessional next week, expected to report third-quarter earnings before the open on Tuesday, Nov. 20.

The equity moved higher the day of its August earnings report, and also gained after earnings one year ago. Looking back eight quarters, KSS has moved an average of 6.6% the day after earnings, regardless of direction. A 6.6% swing to the upside from current levels would put Kohl's stock just south of $85, and into new-high territory.

Meanwhile, Cowen analysts also feel KSS is a "buy" before the holiday shopping season. Specifically, the brokerage firm on Tuesday named Kohl'sone of the best-positioned retailers heading into Black Friday, saying it is "set up well to execute on internal strategies" and should also benefit significantly from "recent dislocation from closed competitors." Plus, the analyst said Kohl's is among the best-positioned to capitalize on strong mobile growth this year.

However, despite the stock's impressive performance over the past year, there's still plenty of room on the bullish bandwagon. In fact, 10 of 17 analysts following KSS maintain icy "hold" or "strong sell" ratings, leaving the door open for potential upgrades to push the shares even higher.

A short squeeze could also boost Kohl's stock, should the company impress after earnings. Short interest represents more than 17% of the equity's total available float, and would take nearly two weeks to buy back, at KSS' average pace of trading.

Finally, an unwinding of pessimism in the options pits could also translate into a boon for the shares. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows traders have bought to open nearly two KSS puts for every call in the past two weeks. The resulting 10-day put/call volume ratio of 1.96 is in the 96th percentile of its annual range, suggesting option buyers are picking up bearish bets over bullish at a much faster pace than usual.