Don't Sweat Sea Stock's Recent Trough

The stock's Relative Strength Index sits in "oversold" territory as well

Deputy Editor
Nov 18, 2021 at 2:43 PM
facebook twitter linkedin


The shares of Sea Ltd (NYSE:SE) have taken a tumble on the charts this week. The Singapore-based tech name reported better-than-expected third-quarter revenue on Tuesday, Nov. 16, and raised its annual forecast, however, the company also announced wider-than-expected losses of 83 cents per share. The stock continued to sail lower the following day, after a slew of bear notes, one of which was a downgrade from BofA Global to "neutral" from "buy," though the firm also raised its price target by $5 to $385.
 
Currently, Sea stock is down 1.7% to trade at $309.10. Nevertheless, this week's negative price action has SE pulling back to its 140-day moving average, after spending a significant period of time above it. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, five similar signals have occurred during the past three years. SE enjoyed a positive one-month return in 80% of those cases, averaging an impressive 16.6% gain. From its current perch, a similar move would put the security back above the $360 level, and closer to its Oct. 19 record high of $372.69. 

 

SE Nov18

It's also worth noting that Sea stock's Relative Strength Index (RSI) of 26 is in "oversold" territory. This means a short-term bounce is likely in the cards. 

Now looks like a good time to weigh in on SE's next move with options, too. The stock's Schaeffer's Volatility Index (SVI) of 42% stands higher than just 12% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. 

 

 

Now is the time to join our thriving community of Event Traders who consistently profit from every earnings season. With this discounted subscription opportunity, you'll stay ahead of the curve and seize opportunities others miss. Do not let Q3 earnings season pass you by – subscribe now and supercharge your portfolio with expert insights that turn market reactions into profit-generating opportunities!! Don't waste another second... join us right now before the next trade targeting +200% is released!