Five Below Stock Could Move Back Toward May Highs

The security carries a more than 28% year-to-date deficit

Digital Content Manager
Nov 4, 2022 at 2:39 PM
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The shares of Five Below Inc (NASDAQ:FIVE) are down 0.8% to trade at $146.89 at last check, and pacing for their fourth loss in five sessions. While the security also carries a 28.9% year-to-date deficit, the $140 region has served as a floor over the past week. Plus, FIVE may soon be able reverse some of its recent losses, as the equity has recently pulled back to a trendline with historically bullish implications. 
Specifically, Five Below stock is within one standard deviation of its 40-day moving average. Per Schaeffer's Senior Quantitative Analyst Rocky White's most recent study, FIVE has seen five similar signals over the past three years, and was higher one month later each time, averaging an 11.3% pop. A move of similar magnitude would place the security back above the $163 level for the first time since early May.


FIVE 40 Day

Though short sellers are hitting the exits in droves, with short interest down 14.3% over the last two reporting periods, they remain in control. The 4.84 million shares sold short make up 8.9% of the stock's available float, indicating the equity could move higher still should some of this pessimism start to unwind.

Additional tailwinds could come from a sentiment shift in the options pits, given FIVE's 50-day put/call volume ratio of 1.53 over at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 87% of readings from the past 12 months. In other words, long puts have been getting picked up at a much quicker-than-usual clip.



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