Despite a strong finish on Friday by many retailing stocks, shares of Sears Holdings are giving back those gains and more today. The stock added more than 2% on Friday, but is lower by more than 3% so far today after announcing that it is looking to buy Restoration Hardware (RSTO) for $6.75 per share. In a filing with the Securities and Exchange Commission, Sears said that it has reiterated its request to enter a confidentiality agreement with Restoration Hardware.
Technically speaking, the stock's short-lived Friday rally met with some staunch resistance at the 115 level. While it may not seem like much in relation to recent trading activity, the 115 level was a hotbed of support from September 2005 through March 2006. The lack of support from this region is reiterated by the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.71, which ranks below 81% of all those taken during the past year. In layman's terms, the lack of negativity from the options crowd means a lack of buyers for the stock and a glut of investors looking to sell on the news.