Historic Bear Note Flashing for Robotics Stock

Recent negative price action has attracted short sellers in droves

Digital Content Manager
Sep 3, 2019 at 3:02 PM
facebook X logo linkedin

Electrical equipment manufacturer ABB Ltd (NYSE:ABB) is down 1.7% at $18.69 at last check. Looking back, ABB attempted a rebound off its three-year low of $17.71, before running out of steam on Friday just below a familiar area of pressure at its 100-day moving average. The stock just ran up to another trendline that could push it even lower too, if history is any indicator.

Specifically, ABB just came within one standard deviation of its 200-day moving average. According to data from Schaeffer's Senior Quanitative Analyst Rocky White, this signal has flashed five times before in the past three years. What's more, the stock was lower one month later each time, averaging a 7.4% loss. From where ABB is currently perched, a similar move would have the equity trading south of last month's lows, at $17.31. 

ABB Sept 3

More negative price action could have short sellers cheering. In the past reporting period short interest has shot up 56.4%. There's plenty of room on the bearish bandwagon, however, as the 5.25 million shares sold short represent less than 1% of the stock's available float, or two days of trading at ABB's average clip. 

Options traders are singing a different tune, with over 13 calls bought for every put on the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) during the last 10 weeks. The resulting ratio sits in the 71st percentile of its annual range, too, suggesting a healthier appetite for bullish bets in recent weeks. Should the stock continue to slide, however, an unwinding of bullish bets could create even more pressure for ABB on the charts. 

Considering this, now might be a good time to speculate on ABB's next move with options. The security's Schaeffer's Volatility Index (SVI) of 19% is in the relatively low 24th percentile of its annual range. This means that options are relatively cheap right now, based on short-term premiums.


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 C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI