Chegg Stock's Red-Hot Rally Could Have Legs

The stock boasts cheap options to boot

Deputy Editor
Aug 13, 2020 at 3:02 PM
facebook X logo linkedin

The shares of education technology company Chegg Inc (NYSE:CHGG) are on this rise this afternoon, up 4.4% at $77.66, just a few days off their August 7, all-time high of $89.82. While the stock did suffer a sharp pullback earlier this week, breaching its formerly supportive 20-day moving average, a historically bullish trendline just below here could move the security back toward its record highs.

Specifically, Chegg stock just came within one standard deviation of its 40-day moving average. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, six similar signals have occurred during the past three years. Chegg stock was higher one month after 67% of these signals, averaging a one-month return of 6.1%. A similar move, from the security's current perch, would put CHGG just above the $82 mark, which is home to the stock's higher lows. 

CHGG Chart August 13

Meanwhile, the options pits have been incredibly bullish of late. In fact, over the last two weeks, 26,000 calls have been exchanged. That's nearly six times the amount of puts -- clocked in at 4,370 -- that have been traded in the same span of time. Short interest has continued its drop since we last checked in on CHGG, too. Down 2.5% in the last two-week reporting period. 

Those looking to bet on CHGG's next move might want to consider options. The equity's Schaeffer's Volatility Index (SVI) of 55% stands higher than just 22% of all other readings from the past 12 months. This implies options traders have been pricing in relatively low volatility expectations at the moment. 


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 calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI