Ball stock's recent peak comes amid historically low implied volatility, which has boosted the security twice before
The shares of Ball Corporation (NYSE: BLL) are up 0.2% to trade at $83.28 at last check, just weeks off their Sept. 16 all-time-high of $85.68. And while the packaging name is already enjoying a 29.4% lead year-to-date -- with support from the 40-day moving average over the last several months -- a historic bullish signal now flashing, indicating more upside may be in the cards for BLL in the near future.
More specifically, the stock's recent peak comes amid historically low implied volatility (IV), which has been a bullish combination for the equity in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been two other times in the past five years when the stock was trading within 2% of a 52-week high, while its Schaeffer's Volatility Index (SVI) sat in the 20th percentile of its annual range or lower -- as is the case with the Ball stock's current SVI of 29.4%, which sits just above the 13th percentile of its 12-month range. Data shows the stock was higher a month later, averaging a return of 4.7% for that time period. From its current perch, a move of similar magnitude would put BLL just above the $87 mark, at yet another record peak.
Analysts are mixed toward the security, with seven of the 12 in coverage sporting a "buy" or better rating, and the remaining five carrying a tepid "hold." Meanwhile, the 12-month consensus target price of $81.29 is a 2.8% discount to current levels. This leaves plenty of room for upgrades and/or price-target hikes moving forward, which could push the security even higher.
On the flip side, calls are popular in the options pits. BLL sports a 50-day call/put volume ratio of 4.94 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that sits in the highest percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets of late. That optimism still rings true today. Amid limited absolute volume, calls are trading at double the average intraday amount. Most popular is the monthly October 82.50 call, followed by the November 85 call.