Treading Teladoc Stock Could Swing Higher

The equity is up over 133.6% year-to-date

Deputy Editor
Dec 2, 2020 at 2:19 PM
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The shares of Teladoc Health Inc (NYSE:TDOC) are around flatline this afternoon. Though the healthcare stock has seen pressure from the $200 level in recent weeks, the security is still enjoying an impressive 133.6% year-to-date lead. Even better, the equity's latest pullback has it near a historically bullish trendline, which could serve to push TDOC higher in the coming weeks. 

More specifically, Teladoc stock just came within one standard deviation of its 200-day moving average, after spending most of 2020 above this trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, two similar signals have occurred during the past three years. One month after each signal, TDOC enjoyed an average return of 14.5%. From its current perch of $195.03, a move of similar magnitude would put the stock up past $223.

TDOCDec2

Though shorts are already hitting the exits, there is still plenty of pessimism left to be unwound, which could push the security even higher. Short interest dropped 7% in the last reporting period, but the 15.37 million shares sold short still make up 21.5% of the stock's available float, or nearly five days to cover at TDOC's average pace of trading.

Lastly, now seems like a decent time to weigh in on Teladoc stock's next move with options. The security's Schaeffer's Volatility Index (SVI) of 54% sits in the relatively low 25th percentile of its annual range. This means the stock is currently sporting attractively priced premiums. 

 

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