Bullish Technical Signal Predicts Rebound for RAD

There's plenty of pent-up skepticism still surrounding RAD

Digital Content Manager
Jul 29, 2020 at 2:52 PM
facebook X logo linkedin

The shares of drugstore chain Rite Aid Corporation (NYSE: RAD) are sliding today, down 1.6% at $15.29 at last check, with recent pressure at the 10-day moving average keeping a tight lid on the equity. Traders might not want to give up on Rite Aid stock just yet, though. The stock just pulled back to a historically bullish trendline that could help it topple this ceiling.

Specifically, RAD just came within one standard deviation of its 160-day moving average, after several weeks above the trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, four similar signals have occurred during the past three years. RAD enjoyed positive returns one month after each signal, averaging an 18% gain. A similar move from its current perch would put RAD just above the $18 level, which has not been crossed since early July.

RAD with 10 and 160 MA new

Regardless, analysts are hesitant toward the security, with all three in coverage carrying a tepid "hold" rating. Meanwhile, the stock's 12-month consensus target price of $10.17 is a whopping 33.6% discount to current levels, meaning price-target hikes could be on RAD's horizon. 

A look at Rite Aid's options pits shows calls more than quadrupling puts, with 6,264 calls exchanged in the past 10 days, as opposed to 1,431 puts. It is possible some of this call buying could be shorts hedging against any unexpected upside risk, however. In the last reporting period, short interest rose 4%, and the 13.49 million shares sold short now account for a jaw-dropping 25.5% of the security's available float. In other words, it would take almost four days to cover these bearish bets at RAD's average pace of trading.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI