Stocks breached their November lows last week and investors will be closely watching to see if they break below their newly set lows. Also this week, the latest readings on gross domestic product and durable goods orders will likely move markets.
As far as earnings go, retailers will be in the spotlight as Gap Inc. (GPS), Target Corp. (TGT), Nordstrom Inc. (JWN), and Kohl’s Corp. (KSS) all report results this week.
Kohl’s is one stock that traders may want to pay attention to going into earnings. The retailer is set to report its fourth-quarter results after the bell on Thursday, and analysts polled by Thomson Reuters are expecting a profit of $1.03 per share, down 21% from a year ago, on revenue of $5.2 billion.
Kohl’s has a tendency to widen between sessions, doing so in 12 of its last 17 quarterly reports. In the near-term, the stock has widened its losses in all of its last four quarters. Traders going short may want to find a ceiling and jump in ahead of the following day’s regular session.
Also Thursday, Dell Inc. (DELL) reports its third-quarter results after the close of trading. The stock fell to its lowest level since July 1997 on Thursday and many shorts have started to exit the stock. Dell’s short interest dropped 12% over the last two weeks of January as the stock plummeted.
Dell is expected to earn $0.28 per share, down 10% from a year ago, on revenue of $14.5 billion, according to analysts. With shares so washed out, investors may want to take a chance ahead of earnings. The stock is mixed between sessions after earnings events, widening its after-hours moves in next-day regular session trade following nine of its last 19 earnings events. In the near-term, the stock is also mixed, cutting back its evening performance in next-day trade once, reversing direction once and widening two times in the four most recent quarters. On November 20, the stock zoomed up 5.9% in after-hours trading but reversed its move in the following days’ regular session, ending down 5.1%.
