Bull & Bear: PetSmart, Inc.

Shares of PetSmart, Inc. PETM are trading lower on the session by 0.77%, at $44.95. With today's price action, you have to wonder where shares could head next… Bulls: Bulls will note that PetSmart has been in an uptrend for the past three months, with shares consolidating and then spiking higher a number of times. Most recently shares jumped from ~$42.50 to ~$46.00 overnight due to better than anticipated earnings. Shares consolidated and then pushed to a fresh 52-week high this morning. The 20-day, 50-day, and 200-day moving averages are all upward-trending. Bulls will also note that PetSmart also raised FY2012 guidance. A bullish trader could buy the July $45/45 risk reversal for a net debit of $0.10. Bears: Bears will note that today's price action, new high now down on the day, is a signal that shares have topped out. With PetSmart now trading near the bottom of the most recent consolidation range, they are in danger of filling the recent earnings gap, which could send shares toward $42.00. Bears will also note that PetSmart is trading far above the 200-day moving average, which could put technical, mean reversion pressure on shares. A bearish trader could buy the October $45/40/35 put tree for a net debit of $1.55. PetSmart, Inc. is a specialty provider of products, services and solutions for the lifetime needs of pets. The company offers a line of products for all the life stages of pets, and offers various pet services, including professional grooming, training, boarding and day camp. It also offers pet products through an e-commerce site. As of January 31, 2010, the company operated 1,149 retail stores and had full-service veterinary hospitals in 752 of its stores.