Bull Signal Predicts Mobile Gaming Stock Could Hit Double-Digits

A short squeeze could also help fuel tailwinds

Digital Content Manager
Jul 30, 2020 at 2:18 PM
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The shares of game developer Glu Mobile Inc. (NASDAQ: GLUU) are flat today despite broad market volatility, last seen up trading at $9.38, with short-term pressure from its 20-day moving average keeping a tight lid on the equity. Traders might not want to look down on GLUU yet, however, as the security has just pulled back to a historically bullish trendline that could help it topple this short-term ceiling.

Specifically, GLUU is within one standard deviation of the 80-day moving average, after several months trading above the trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, five similar signals have occurred during the past three years. The stock enjoyed positive returns one month after each signal, averaging an 9.4% gain. A similar move from its current perch would put Glu Mobile stock just above the $10 level, a territory has not been crossed for the past several weeks.


A short squeeze could fuel additional gains. Short interest increased by almost 15% in the two most recent reporting periods, yet the 11.11 million shares sold short still accounts for a healthy 7.9% of GLUU's total available float. 

That sentiment is reflected in the options pits, where the appetite for calls is extremely high. GLUU sports a 50-day call/put volume ratio of 47.60 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 98th percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets as of late.


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