Signal Says Clear Skies Ahead For Garmin Stock

GRMN options are attractively priced at the moment

Managing Editor
Nov 11, 2019 at 12:25 PM
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To close out October, GPS concern Garmin Ltd. (NASDAQ:GRMN) gapped higher in the wake of a well-received corporate report. GRMN continued to climb into November, and nabbed a nearly 12-year high of $97.59 earlier today. There's reason to believe the stock still has more room to run too, after flashing this bullish signal. 

More specifically, GRMN's new highs are coinciding with historically low implied volatility (IV) -- a combination that has been bullish for the stock in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been six other instance when Garmin stock was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) sat in the 20th annual percentile or lower -- as it the case with Garmin's current SVI of 18%, in the 15th annual percentile. 

The data shows that one month after those six previous signals, GRMN was up 10.4%. From its current perch at $97.21, another move this big would put the stock around $107 per share one month from now -- in another round of decade-high territory. There's also newfound support at the shares' 10-day moving average to consider. 

Daily Stock Chart GRMN

For a stock that's up 53% year-to-date, analysts sure seem skeptical to dole out bull notes. All six of the brokerages covering GRMN rate it a "hold" or "sell," while the consensus 12-month price target of $87.67 is a 10% discount to its current perch. A round of upgrades and/or price-target hikes could also keep the wind at the security's back.

Plus, Garmin stock sports a Schaeffer's Volatility Scorecard (SVS) of 80 (out of a possible 100), meaning the security has consistently made bigger moves on the charts than its options premiums have priced in over the past year.

 

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