Bullish Trendline Looms for Five Below Stock
After a tumultuous week, shares of Five Below Inc (NASDAQ:FIVE) are bouncing back, up 5% to $101.88. This rebound could be just the beginning, as the retail stock approaches a historically bullish trendline.
Psychological Pivot Point Breached
The recent pullback saw the stock dip below $100, a psychologically significant level that has been a key pivot point in the last month of the year. This breach could be a catalyst for further growth, as investors look to capitalize on the stock’s newfound momentum.
80-Day Moving Average in Sight
According to Schaeffer’s Senior Quantitative Analyst Rock White, FIVE is now within striking distance of its 80-day moving average, a level it has spent 80% of the time above over the past two months and 8 of the last 10 trading days. This proximity to the moving average has historically preceded significant gains, with the stock rising an average of 12.6% one month later in three out of four similar instances over the past three years.
Short Interest Unwinding Could Fuel Growth
A potential unwinding of short interest, which currently represents 7.4% of the stock’s available float, could provide an additional boost to the stock’s upward momentum. As short sellers cover their positions, demand for the stock could increase, driving prices higher.
Options Traders Shift to Bullish
A shift in sentiment among options traders could also provide tailwinds for the stock. The 10-day put/call volume ratio of 1.79 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 92% of readings from the past year, indicating that options traders have been more bearish than usual. As this sentiment shifts, it could create a bullish environment for the stock.
Leave a Reply