Fiat Chrysler Stock Revs Up with Bull Signal Flashing

FCAU can build on its 39% three-month advance

Deputy Editor
Aug 24, 2020 at 1:52 PM
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The shares of Fiat Chrysler Automobiles (NYSE:FCAU) are rising this afternoon, up 2.8% at $11.30 at last check, although the exact catalyst is unknown. What is known is that prior to today, the automobile stock had pulled back to a trendline that, if past is precedent, could send FCAU higher in the coming month.

Specifically, Fiat Chrysler stock just came within one standard deviation of its 40-day moving average. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, two similar signals have occurred during the past three years. FCAU was higher one month after both of these signals, averaging a one-month return of 10.8%. A similar move, from the security's current perch, would put the equity at $12.52 -- a level FCAU hasn't reached since just before the broader market's mid-March pullback.

FCAU Chart August 24

The FCAU options pits have seen a renewed focus on puts lately. This is per the stock's 50-day put/call volume ratio of 0.95 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). While this means calls outnumber puts on an absolute basis, that ratio stands higher than 90% of readings from the past year, which indicates a much healthier appetite for long puts at the moment. 

Those looking to bet on Fiat Chrysler stock's next move should consider options. The equity's Schaeffer's Volatility Index (SVI) of 32% stands higher than just 3% of all other readings from the past 12 months. This implies options traders have been pricing in relatively low volatility expectations on FCAU. 

 

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