Buy Signal Flashing on Outperforming TEAM

Calls have been popular on TEAM

Managing Editor
Jan 27, 2020 at 12:29 PM
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Software development firm Atlassian Corporation (NASDAQ:TEAM) is down 1.6% at $144.73 this morning. However, now might be the perfect time to take a risk on TEAM. Not only is the stock up 20% in 2020, fresh off the long-term support of its 180-day moving average and still enjoying the aftermath of a notable earnings beat, but data from Schaeffer's Senior Quantitative Analyst Rocky White suggests TEAM may also be flashing a new buy signal. 

Daily TEAM with 180MA

In fact, Atlassian stock'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 Atlassian 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 is the case with MU's current SVI of 37%, in the 19th percentile of its 12-month range.

The data shows that one month after those three previous signals, Atlassian stock was up 7.1%. From its current perch, another move of that magnitude would put the stock at the $155 level for the first time ever.

Calls have also been popular of late on TEAM. This is per the stock's 10-day call/put volume ratio of 2.56 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 86th annual percentile. In other words, more than 2.5 calls have been purchased for every put within the past two weeks of trading.

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