Security is flashing a historically bullish signal on the charts
The shares of Name of the game of chance Penn National Gaming, Inc (NASDAQ:PENN) are down 3.5% on the last check to $ 131.65. Security is pulling back from yesterday’s all-time high of $ 142, although it is still a staggering 1,443% year over year, with support again for the 40-day moving average. Another reason traders shouldn’t break a sweat on this retreat is that a historical blinking signal blinking now could position PENN for even more record highs in the near future.
In particular, the recent high in Penn National Gaming stock is due to historically low Implied Volatility (IV), which has historically been a bullish combination for the stock. According to Schaeffers Senior Quantitative Analyst Rocky White, there have been three more times in the past five years that the stock has traded within 2% of its 52-week high while its Schaeffer Volatility Index (SVI) was in the 20th percentile of its annual range or lower. That is now the case with the stock price’s SVI of 73%, which is in the sixth percentile of its 12-month range.
White’s data shows that one month after these signals, PENN was higher under 67% of those circumstances, averaging 9.4% return for that period. A similar move would take security from its current location just above the $ 144 mark and hit a new all-time high.
The analysts are evenly split across Penn National Gaming stock, leaving the door open for price hikes and / or upgrades. Of the 14 analysts in question, seven describe a lukewarm “hold” or worse. Additionally, the 12-month consensus target of $ 109.36 is a 17.1% discount from current levels.
Shorts have already started hitting the exits, although there is still a lot of pessimism to unwind which could propel stocks higher. Short rates fell 16.6% over the last two periods, but the 9.47 million short stocks sold still account for a whopping 8.3% of the stock’s free float.
Finally, equity Schaeffer’s Volatility Scorecard (SVS) is up 98 from 100. In simpler terms, this indicates that the security has exceeded volatility expectations over the past year.