The security could soon bounce off its 40-day moving average
The shares of At Home Group Inc (NYSE:HOME) are down 4.2% at $27.75 at last check. The security is still taking a breather from a March 23, two-year high of $34.40, though it sports a jaw-dropping 1,359.4% year-over-year lead. The good news for HOME is that this pullback has landed the equity near a historically bullish trendline, which could mean even higher levels over the coming weeks.
Digging deeper, At Home stock just came within one standard deviation of its 40-day moving average, after spending several days above this trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, four similar signals have occurred in the past three years. The security enjoyed a positive return one month later in 75% of those cases, averaging a whopping 41.5% gain. From its current perch, a move of similar magnitude would put HOME over the $39 mark, just shy of its July 2018 record high of $40.85.
Analysts are pessimistic towards HOME, meaning upgrades could be in the cards for the security. Of the eight in question, five carried a tepid "hold" or worse rating. Meanwhile, short sellers have already started to hit the exits, though there is plenty of pessimism left to be unwound. Short interest fell 6.3% over the last two reporting periods, yet the 5.85 million shares sold short account for a significant 9.1% of the stock's available float.
Now seems like a great opportunity to weigh in on HOME's next move with options. The equity's Schaeffer's Volatility Index (SVI) of 65% stands in the first percentile of all other readings from the past year. This suggests options players are pricing in lower-than-usual volatility expectations at the moment.
Finally, the security's Schaeffer's Volatility Scorecard (SVS) sits at 100, indicating HOME has exceeded volatility expectations during the past 12 months -- a boon for options buyers.