Software Sector Swoon Sets Up Buy Signal for COUP Stock

COUP shares rebounded from their 80-day moving average just a few weeks ago

Oct 17, 2019 at 2:19 PM
facebook X logo linkedin

Software stocks got hit hard on Wednesday, and the sector-wide pullback has some names flashing what historically have been solid buy signals. For instance, Coupa Software Inc (NASDAQ:COUP) lost 9.3% yesterday, its worst day since last December. COUP shares were last seen down another 2.9% today at $136.18, actually putting them below the 80-day moving average, a trendline that served as support in the past.

coup stock oct 17

But just because COUP has fallen below the 80-day doesn't mean it isn't due for a big move higher -- just look at the price action at the end of September when the shares moved below the trendline, only to quickly shoot higher. Overall, data from Schaeffer's Senior Quantitative Analyst Rocky White shows five previous pullbacks of this type to the 80-day in the past three years, and the stock has averaged a 21-day gain of 9.3% following those signals.

Another quick move higher could catch some options traders off guard, since put buying has picked up somewhat at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). While the 10-day put/call volume ratio across these exchanges of 0.96 still shows call buying with a slight edge in the past two weeks, this reading ranks in the 87th annual percentile, meaning this level of put buying is unusual.

Peak open interest is on the put side, too, with 6,493 contracts sitting at the November 125 put, although data shows mostly sell-to-open action here, meaning traders see this level serving as support. In today's trading, new positions are opening at the November 145 call.

Outside the options pits, bears keep piling on. Short interest rose 22.5% in the last reporting period, and now accounts for 16.4% of COUP's float.


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