One of the hottest stocks in the last 12 months is Sea Ltd (NYSE:SE). The e-sports name has more than tripled year-over-year, culminating in a Jan. 7 record high of $41.80. But SE could just be getting started; the stock is currently flashing a historically bullish signal.
More specifically, Sea's recent high comes amid 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 three other instances in the past five years when SE 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 is the case with Sea's current SVI of 21%, in the 19th percentile of its 12-month range.
The data shows that one month after those two previous signals, Sea stock was up 8.6%, with all three returns positive. From its current perch at $40.91, another move of that magnitude would put the stock into fresh record high territory. Helping fuel the equity's bullish case is its 30-day moving average, a trendline that's served as support since a mid-November bull gap.
A short squeeze could also fuel additional gains. Short interest fell by 9.3% in the most recent reporting period, yet still accounts for 9.4% of SE's total available float, and almost seven days' worth of buying power, at the stock's average pace of trading.
Lastly, Sea stock's Schaeffer's Volatility Scorecard (SVS) comes in at 94 out of 100. In other words, the security has consistently made bigger moves on the charts than its options premiums have priced in over the past year.