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Up roughly 40% in the last 12 months to sit at $223.05, rookie Dow Jones Industrial Average (DJI) component Visa Inc (NYSE:V) has been trending solidly higher over the past three years. Since early March 2011, in fact, shares of the credit card concern have nearly tripled in value.
Visa shares have now moved back above their 40-day moving average, which has offered sporadic support to the security dating back several months. Schaeffer's Senior Quantitative Analyst Rocky White points out that in the 17 prior times Visa has tested support at this trendline, the stock gained ground over the subsequent three weeks 77% of the time. What's more, the average 21-day return across all signals is 3.6%.
The stock's impressive price action hasn't inspired bullish action in the options pits, however. Visa has racked up a 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.71. This has increased from its month-ago reading of 0.63 and now stands in the 94th annual percentile. In simpler terms, demand for long put options (relative to calls) is nearing a yearly peak.
Short sellers have also descended upon Visa shares of late. Currently 15.3 million shares are sold short, the highest amount since January 2011. If these short sellers begin to head for the exits, it would take nearly a week of trading -- at the stock's average daily volume -- to cover all of these bearish bets.
A capitulation among options players or a short-squeeze situation could stir up additional buying demand for Visa Inc (NYSE:V) shares in the short-to-intermediate term. Fundamentally speaking, the company today reported that processed transactions grew by 11% in January and February, dipping slightly from the 13% growth rate in the fourth quarter of last year.