SWKS could be a bargain at current levels, if history repeats
Since touching a record high of $117.65 in early November, the shares of Skyworks Solutions Inc (NASDAQ:SWKS) have dropped 19%. However, in the wake of the recent pullback in Apple suppliers -- exacerbated by bearish analyst attention today -- SWKS stock could be flashing a big "buy." Below, we'll take a look at the technical signal that's preceded pops for the tech stock in recent history.
SWKS stock recently came within one standard deviation of its ascending 320-day moving average, after a lengthy stretch above this trendline. One month after the last five pullbacks of this kind, the equity was higher 75% of the time, and up an average of 8.34%, according to Schaeffer's Senior Quantitative Analyst Rocky White.
Skyworks stock is was down 1% at $94.84, at last check, after analysts at Cowen waxed pessimistic on Apple suppliers. Specifically, Cowen cut its price target on SWKS stock to $115 from $120, citing concerns about lackluster iPhone demand. Another 8.34% rebound from current levels would put the currently oversold shares around $102.75 -- back above the century mark.
Meanwhile, at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHL), SWKS sports a 10-day put/call volume ratio of 1.37, ranking higher than 87% of ratios in its annual range. This suggests that puts have been purchased over calls at a faster-than-usual clips during the past two weeks. An unwinding of the recent pessimism in the options pits could also be a boon for Skyworks stock.
Despite the equity's long-term uptrend, short interest represents nearly a week's worth of pent-up buying demand, at SWKS' average daily trading volume. Should the equity once again bounce off its 320-day moving average, an exodus of shorts could also translate into tailwinds for the shares.