SE Eyes Fresh Records After Sounding Bullish Signal

The equity is already up over 114% year-over-year

Digital Content Manager
Jul 8, 2021 at 3:16 PM
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The shares of Singapore-based tech conglomerate Sea Ltd (NYSE:SE) are flat today, last seen down up 0.1% at $268.01. Despite today's middling price action, the security boasts a 114.3% year-over-year lead, and is fresh off a June 24 all-time high of $297.75. Another reason why investors should not scoff at Sea stock just yet is that it could soon bounce off a trendline with historically bullish implications.

More specifically, the security just came within one standard deviation of its 40-day moving average, after trading above this trendline since May. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, 13 similar signals have occurred in the past three years. The equity enjoyed a positive return one month later in 77% of these cases, averaging a significant 11.7% gain. From its current perch, a comparable move would put the Sea stock at a fresh all-time high just above the $299 level. 

SE 40 Day

Meanwhile, the options pits are bearish, indicating SE could also benefit from a shift in sentiment. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.19, which sits higher than 71% of readings from the past year. In simpler terms, short-term options traders have rarely been more put-biased. 

That being said, Sea stock sports affordably priced premiums at the moment. The security's Schaeffer's Volatility Index (SVI) of 44% stands in the low 11th percentile of readings in its annual range. This means options players are now pricing in low volatility expectations for SE. Plus, the equity's Schaeffer's Volatility Scorecard (SVS) sits at an elevated 81 out of 100. This means SE has exceeded option traders' volatility expectations during the past year -- a boon for buyers.

 

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