SunPower Stock Shines a 'Buy' Signal

A short squeeze could push SPWR even higher

Managing Editor
Jan 11, 2018 at 12:23 PM
facebook twitter linkedin


SunPower Corporation (NASDAQ:SPWR) is up 9.6% to trade at $9.31, on track to finish about the $9 level for the first time since Dec. 22. Earlier in the week, however, the solar stock pulled back to within one standard deviation of its 40-day moving average. This SPWR pullback may have marked a buying opportunity, as the trendline has historically had bullish implications.

According to Schaeffer's Senior Quantitative Analyst Rocky White, following the last four pullbacks to the 40-day moving average in the past three years, the energy name was up an average 11.95% one month later. If past is precedent, a move of similar magnitude could put SunPower stock back atop the $10 level for the first time since its late-July bear gap.

Pullbacks SPWR

Analyst sentiment still leans bearish. Exactly 60% of brokerages covering the solar stock rate the shares a "hold" or "strong sell." In addition, the average 12-month price target sits at $9.29 -- below current levels. Continued technical outperformance could prompt analysts to re-think their bearish positions.

A short squeeze could also provide more fuel for SunPower's rally. Short interest increased by 8.2% during the last reporting period to 13.30 million shares. This represents a whopping 23% of SPWR's total available float.

In the options pits, calls have been favored over puts among short-term traders. This is according to Schaeffer's put/call open interest ratio (SOIR) of 0.45, in the 10th annual percentile. Along those lines, SPWR options are cheap right now. The stock's Schaeffer's Volatility Index (SVI) of 52% ranks in the 15th annual percentile, meaning low volatility expectations are currently being priced into short-term contracts.

 

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 

 


 


 
Special Offers from Schaeffer's Trading Partners