25 Stocks for Short-Term Options Bears – Schaeffers Research (blog)

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The end of this week will mark the second — and last — Friday the 13th of 2017, a day that strikes fear in the heart of the superstitious. This day has spooked the stock market in recent years, though the S&P 500 Index (SPX) bucked this bearish trend this past January. But, if history is any guide, the SPX could be headed toward end-of-week losses, with retail stocks Kohl’s Corporation (NYSE:KSS) and Target Corporation (NYSE:TGT) among two of the short-term options bears may want to drill down on.

SPX Returns on Friday the 13th

It should be pointed out that this data — like other stock market indicators — is random, and should be taken lightly. That said, Schaeffer’s Senior Quantitative Analyst Rocky White found that the S&P 500 has tended to underperform on Friday the 13th, based on the 19 previous occurrences since 2007. Specifically, the SPX has averaged a Friday the 13th loss of 0.01%, versus an anytime gain of 0.03%.

Widening the time frame, however, shows a slight outperformance on Friday the 13th. When accounting for the 114 occurrences since 1950, the SPX has averaged a gain 0.07%, compared to an anytime return of 0.03% — with higher-than-typical 57.9% positive returns.

SPX returns on friday the 13th

Worst Stocks to Own on Friday the 13th

While this oil name is among the best stocks to own on Friday the 13th, retailers KSS and TGT are among the worst. Below is a list of the 25 worst stocks to own on Friday the 13th, with each name having at least 10 returns on the ominous day since 2010.

worst stocks to own friday the 13th

Kohl’s stock, for instance, has averaged a Friday the 13th loss of 0.9% over the last 13 occurrences, turning in a positive return just 23% of the time. The equity’s rally off its August lows was quickly halted in the $47.40 region — a 50% Fibonacci retracement of its December-to-June plunge, with the shares last seen trading at $43.09.

TGT, meanwhile, has averaged a loss of 0.8% over the past 13 Friday the 13ths, ending the day positive just 15% of the time. This would be more of the same for the stock, which is down 18.1% year-to-date to trade at $59.11 — with a recent rebound stalling out near the round $60, home to Target’s late-February bear gap highs.

Plus, low volatility expectations are currently being priced into short-term options for both Kohl’s and Target — a potential boon to premium buyers. While KSS’ Schaeffer’s Volatility Index (SVI) of 32% ranks lower than 94% of all comparable readings taken in the past year, TGT’s SVI of 22% ranks in the 20th annual percentile.

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