This Long-Term Bull Signal Has Never Been Wrong

There's plenty of pessimism surrounding MTCH still

by Lillian Currens

Published on Apr 22, 2020 at 3:21 PM
Updated on Jun 24, 2020 at 10:16 AM

The shares of online dating specialist Match Group Inc (NASDAQ:MTCH) are faring well amid the most recent bout of market volatility, steadily rebounding off their late-March lows, with solid support from their 10-day moving average. While some of this momentum appears to have lost steam just below the year-to-date breakeven level, the stock is headed back towards this region today, up 3.1% at $79.26, at last check. What's more, MTCH just pulled back to a long-term area of support that could help topple this ceiling in the coming months. 

The trendline in question is MTCH's 10-month moving average. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, five similar signals have occurred during the past 15 years. MTCH enjoyed positive returns three months after each signal, and averaged a 26.03% gain. A similar move, from the security's current perch, would put MTCH just below the $100 level, which marks untouched territory on the charts. 

MTCH Apr 22

There's plenty of pent-up pessimism surrounding MTCH, which could push the Tinder parent higher, should some of these bearish bets begin to unwind. For one, short interest is on the rise, up 9.5% in the last two reporting periods, and the 36.02 million shares sold short represent an eyebrow-raising 67.2% of the stock's available float. In other words, it would take nearly 13 days to buy back these pessimistic positions.  

Echoing this, MTCH sports a 50-day put/call volume ratio of 2.42 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than all but 1% of readings from the past year, meaning options players have rarely been more put-biased in the last 12 months. 

 


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