This Lending Stock's Bull Signal Has Never Been Wrong

COOP already sports a more than 33% year-over-year lead

Digital Content Manager
May 9, 2022 at 12:40 PM
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Lending name Mr Cooper Group Inc (NASDAQ:COOP) has seen a volatile couple of months, though it's shined as a relative outperformer, up 5.3% in 2022, and 33.5% in the past 12 months. The equity's most drastic pullback was captured by a familiar floor at the $40 level in mid-April, while the $42- $43 area has emerged as support in recent weeks. On top of this, COOP recently pulled back to a historically bullish moving average that could help it weather the storm that is the current broader-market selloff. 

The trendline in question is COOP's 160-day moving average, which the security just came within 2 percentage points of after a lengthy period above here. Per data from Schaeffer's Senior Quantitative Analyst Rocky White, Mr Cooper stock has seen five similar pullbacks in the past three years. After all five of these signals, COOP was higher one month later, averaging an 11.5% return. From its current perch, a similar move would put the shares just below the $50 level and closer to their Feb. 16 record high of $52.34. 

coop may 9

A shift in the options pits could provide additional support for the stock. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), COOP sports a 50-day put/call volume ratio of 5.15, which sits higher than 92% of readings from the past year. In other words, long puts have rarely been more popular during this time period.  

A round of bull notes may create tailwinds, too. Of the eight in coverage, four say "hold," and four say "buy" or better. Meanwhile, though short sellers are starting to hit the exits, shedding 14.1% in the last two reporting periods, short interest still makes up 4.5% of the stock's available float, or a little over three days' worth of pent-up buying power. 

 

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