The stock just ran into a historically bullish trendline
Match Group Inc (NASDAQ:MTCH) stock hit a record high of $60.91 on Feb. 7 -- almost doubling its Nov. 20 low of $31.69 in little over a two-month time frame. The online dating concern has subsequently taken a breather on the charts, but the pullback could be a buying opportunity, if recent history is any indicator.
MTCH just came within one standard deviation of its 40-day moving average, after an extended period above the trendline. This signal has flashed eight other times, according to data from Schaeffer's Senior Quantitative Analyst Rocky White. The security was positive one month after half of these signals, averaging a 5.7% gain. At the stock's current perch of $55.11, a similar move would place it just below its February peak at $58.25.
Short interest is on the decline, down 12.3% in the last two reporting periods, but the 16.63 million shares sold short still represent a healthy 32.5% of the stock's available float. It would take over a week to buy back these bearish bets, at MTCH stock's average pace of trading, leaving the door open for a short squeeze lending additional tailwinds.
Plus, MTCH options are still relatively inexpensive, too. Match stock's Schaeffer's Volatility Index (SVI) of 40% sits higher than only 5% of all other readings in the past year. This indicates that now might be an attractive time to speculate with near-term options on the equity's next leg higher. What's more, the security's Schaeffer's Volatility Scorecard (SVS) stands at 96 out of a possible 100, indicating MTCH has exceeded options traders' volatility expectations in the past year.