Bull Signal Says Apparel Stock May Run Up the Charts

The shares of Under Armour Inc (NYSE:UAA) are up 0.9% at $22.99 at last check. While a catalyst for today's positive price action remains unclear, the sports apparel retailer just hit a May 5, two-year high of $26.54, and currently sports a whopping 197.9% year-over-year lead. The even better news is that the equity's latest pullback has placed it near a historically bullish trendline, which could send UAA back up the charts in the coming weeks.

Digging deeper, Under Armour stock just came within one standard deviation of its 80-day moving average, after spending weeks above this trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, six similar signals have occurred in the past three years. The security enjoyed a positive return one month later in 80% of those cases, averaging a significant 4.7% gain. From its current perch, a comparable move would put UAA just over the $24 mark.

The brokerage bunch is leaning bearish towards UAA, leaving ample room for upgrades going forward. Of the 22 analysts in question, 12 carry a tepid "hold" or worse rating, while the remaining 10 say "strong buy." A short squeeze could also fuel additional gains, as short interest currently makes up 9.9% of the stock's available float.

Now seems like a good opportunity to weigh in on Under Armour stock's next move with options. The security's Schaeffer's Volatility Index (SVI) of 42% stands in the low 8th percentile of its annual range, indicating options players are now pricing in low volatility expectations.