Deckers Outdoor Stock Looks Like a Solid Bearish Play

Footwear stock Deckers Outdoor (NYSE:DECK) gapped to a two-year low in early November following its Oct. 24, 15.2% post-earnings drawdown. Despite rallying back to that pre-earnings close, the shares are now running into overhead pressure at their 200-day moving average. What’s more, the equity sits firmly in "overbought" territory, per its 14-day Relative Strength Index (RSI) of 72.3.

 

 
Shorts have covered nearly half their positions from August to October, but DECK has failed to surge, underscoring its technical weakness. Short interest is building once again, though, and may become more active in terms of shorting rallies.
 
Our recommended put has a leverage ratio of 3.8, and will double on a 22.4% drop in the underlying equity.