Real Estate Stock Pulls Back to Historically Bullish Trendline

A shift in analyst sentiment could create additional tailwinds for SKT

Digital Content Manager
May 5, 2021 at 12:36 PM
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The shares of Tanger Factory Outlet Centers Inc. (NYSE:SKT) are up 0.7% at $16.99 at last check. The equity took a major step back since its brief surge on March 4 to a two-year high of $22.40, but it still carries a notable 162.5% year-over-year lead. The good news is that this pullback has placed the security near a trendline with historically bullish implications, which could push SKT even higher in the near future.

Specifically, Tanger Factory Outlet stock just came within one standard deviation of its 40-day moving average, after spending a lengthy period above this important trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, five 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 14.3% gain. From its current perch, a move of similar magnitude would put SKT just over the $19 level, an area that has pressured the stock lower since its March peak.

SKT 40 Day

The brokerage bunch is firmly bearish when it comes to Tanger Factory Outlet stock, meaning there is still plenty of room for upgrades and/or price-target hikes going forward. Of the four analysts in coverage, two carried a tepid "hold" rating, while two said "sell" or worse. What's more, the 12-month consensus target price of $13.58 is a 20.3% discount to SKT's current levels.

A short squeeze may also be in the security's horizon, potentially putting even more wind at the stock's back. Short interest rose 4.5% over the most recent reporting period, and the 24.40 million share sold short account for a hefty 25.9% of the stock's available float, or nearly a week's worth of pent-up buying power.

Finally, SKT options are a bargain at the moment. This is per the security's Schaeffer's Volatility Index (SVI) of 59%, which sits in the low sixth percentile of its annual range, indicating options players are currently pricing in low volatility expectations.

 

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