Security has just retreated to the historically bullish 320-day moving average
The shares of vegetable Food producer Beyond Meat Inc (NASDAQ: BYND) recently cooled off after hitting roughly a two-year high of $ 221 on Jan. 26. The good news is that this recent drop has put security near a historically bullish trendline that could get BYND back on the charts in the coming weeks.
In particular, Beyond Meat stock was only within one standard deviation of its 320-day moving average after spending some time above that trendline. According to Schaeffer’s senior quantitative analyst Rocky White, three similar signals have occurred in the past three years. A month later, the security posted a positive return and achieved an average gain of a whopping 21.8% over that period. From its current location, a move of similar magnitude would bring BYND above the $ 160 mark, which is closer to that January high.
The analysts are still pessimistic about the share price and leave the door open for possible price increases and / or upgrades in the near future. Of the 16 in question, 14 have a “hold” or lower rating. Additionally, the 12 month consensus target of $ 128.80 is a 2% discount on current levels.
Short sellers have also amassed security and made it ripe for a brief squeeze. Short rates rose 33.9% over the last two reporting periods, and the 10.95 million shares sold accounted for a whopping 19.7% of the stock’s available free float.
A shift in the option pits could generate even more tailwind. This corresponds to Beyond Meat’s put / call open interest ratio (SOIR) of 1.46 out of 1.46, which is in the 96th percentile of its annual range. In other words, short-term traders have rarely been more biased.
Now might be a good time to weigh BYND’s next move with options. The Schaeffer’s Volatility Index (SVI) of 44% is the lowest percentile of all other values of the past year. This suggests that option players are currently pricing in lower than usual volatility expectations.
After all, security is Schaeffer’s Volatility Scorecard (SVS) is at 95 out of 100, indicating that the stock has exceeded volatility expectations over the past 12 months – a boon for option buyers.