History Says This May Be a Retail Stock to Sell

Macy's stock has been seeing long-term pressure at its 70-day moving average

Shares of retail giant Macy's Inc (NYSE:M) are modestly higher this afternoon, last seen up 0.5%, at $22.02. Despite today's lift, the security has struggled on the charts long term, steadily falling since touching an annual high of $41.99 last August. Just over a week off its most recent annual low, the shares have shed 26% year-to-date, and per data from Schaeffer's Senior Quantitative Analyst Rocky White, Macy's stock may be preparing to fall even further on the charts.

Specifically, the security is running into resistance at its 70-day moving average after a lengthy stretch below the trendline. This signal has flashed six times in the past few years, per White, resulting in an average 21-day loss of 8.6%, with with more than three-quarters of the returns negative. A similar plunge would put M back near $20.13 -- skimming annual-low territory.

Despite its underperformance, calls have been a popular pick among Macy's stock options traders. This is per data from the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which shows M with a 50-day call/put volume ratio of 2.57, ranking in the 84th annual percentile. In other terms, calls have been bought over puts at a faster-than-usual pace.

M analysts, however, are not so convinced the stock will see improvement anytime soon. Currently, all eight covering firms sport a "hold," "sell," or "strong sell" rating on the stock.

Meanwhile, short interest has grown nearly 4% during the past two reporting periods, and now accounts for over 14% of the stock's total available float. At Macy's average pace of trading, it would take shorts a full week to buy back their bearish bets.