Defense Stock May Extend Surge to 11-Year Highs

Kratos stock is flashing a historical buy signal

Managing Editor
Jun 21, 2019 at 12:32 PM
facebook X logo linkedin

San Diego-based Kratos Defense & Security Solutions Inc (NASDAQ:KTOS) is moving lower this afternoon, after tying its decade-plus closing high of $22.78 last night. Last seen down 1.5% at $22.44, KTOS' downtrend may be short-lived, per a fresh bull signal flashing on the equity. Below, we will take a look at recent data from Schaeffer's Senior Quantitative Analyst Chris Prybal, which suggests Kratos' stock may be ready for another surge higher.

KTOS has been on a dramatic upswing since its mid-May post-earningst bull-gap, as well as its surge off the supportive 180-day moving average. This trendline also served as support during pullbacks in the fourth quarter. Year-to-date, the security is up 60%.

Daily KTOS with 180MA

Digging deeper, Kratos' short-term option premiums look relatively inexpensive at the moment. This is per the security's Schaeffer's Volatility Index (SVI) of 39%, which stands in the low 11th percentile of its annual range, as of Thursday's close. In other words, near-term options are pricing in relatively low volatility expectations.

Since 2008, there have been seven other times KTOS shares were within 2% of a 52-week high and simultaneously sported an SVI in the bottom 20% of its annual range. After those signals, the stock was higher one month later 71% of the time, averaging a gain of 6.6%, according to data from Prybal. Another surge of this size would put the shares at $23.92 -- a fresh 11-year high.

Albeit amid low absolute volume, calls look to be still flying off Kratos' shelves. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), KTOS sports a 10-day call/put volume ratio of 25.70, ranking in the 78th annual percentile. This means that approximately 25 calls have been bought to open for every put during the past two weeks on the equity.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI