That bull signal hasn’t been wrong for the past three years
The shares of Activision Blizzard Inc (NASDAQ: ATVI) are up 1.1% to $ 92.45 on the last review. Longer-term, stocks are still struggling to break a $ 100 cap, although the stock found a home above the region in February and hit an all-time high of $ 104.53 on February 16 before pulling back. ATVI is well on its way to breaking a four-day losing streak and could finally break past breakeven in 2021 if today’s positive price action continues. Additionally, the stock recently retreated onto a historic bullish trendline that could help push the stock back into record highs.
Activision Blizzard stock, in particular, only got one standard deviation from its 160-day moving average after spending significant time above the trendline. According to data from Schaeffer’s Senior Quantitative Analyst Rocky White, four similar signals have occurred over the past three years. ATVI posted positive returns a month after each signal, an average increase of 8.8%. A similar move from its current position would bring equity back over the $ 100 region.
The brokerage group is already largely optimistic about the gaming name. 15 analysts currently have a “strong buy rating” and two others recommend “buy”. In the meantime, only two say “hold” and no “sell” is seen. Additionally, the 12-month consensus price target of $ 116.41 is a healthy 25.9% premium over current levels.
This optimism is reflected in the option pits, where calls have been favored over the past two weeks. This corresponds to the 10-day call / put volume ratio of Activision Blizzard stock of 5.93 on the International Securities Exchange (ISE), the Cboe Options Exchange (CBOE) and the NASDAQ OMX PHLX (PHLX). This ratio is above 84% of the annual values, indicating a greater preference for calls.
And speculating about ATVI’s next move with options might be the cheapest move. The stock’s Schaeffer’s Volatility Index (SVI) of 24% is above just 6% of values in its annual range, suggesting option players are currently pricing in relatively low volatility expectations – a boon for premium buyers.