ZTO Pulls Back to Bullish Trendline After Bear Note

The stock is still holding on to its year-to-date breakeven point

Digital Content Manager
Mar 23, 2020 at 12:33 PM
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China-based shipping specialist ZTO Express (Cayman) Inc (NYSE:ZTO) is getting hit today after Jefferies cut its price target to $27.10 from $29.20. In response, ZTO is down 1.8% at $24.25. And while the shares continue to wallow beneath newfound pressure at their 20-day moving average, ZTO just pulled back to another trendline that could help keep the China stock afloat in coming weeks. 

This trendline is the 80-day moving average, and according to data from Schaeffer's Senior Quantitative Analyst Rocky White, ZTO has come within one standard deviation of here five other times in the past three years. One month later the equity has higher 75% of the time, and averaged a gain of 3.89%. A similar jump from ZTO's current perch would put the equity at $25.19, pushing back up against aforementioned pressure at the 20-day. 

ZTO chart YoY

All things considered, ZTO is holding up fairly well amid the broad market selloff. The stock is clinging to a 2.7% gain for the year, and up 37.6% in the last 12 months with even more support at the $23- $24 area providing a buffer during the past few volatile months. 

This resilience has inspired plenty of optimism among the brokerage bunch. Coming into today, all four analysts in coverage considered ZTO Express a "buy" or better. Meanwhile, the consensus 12-month price target of $27.67 is a lofty 15.7% premium to current levels. 

The options pits are singing a different tune, however. This is per ZTO's 10-day put/call volume ratio of 1.03 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits in the 75th percentile of its annual range, suggesting a much bigger appetite for long puts of late. 

 

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