INMD is a medtech stock to buy the dip on
InMode Ltd (NASDAQ:INMD) has added 35.6% over the last nine months, but more recently has consolidated below the $39 area. The silver lining is the medical equipment stock pulled back to a historically bullish trendline that has usually resulted in big surges for INMD.
INMD has pulled back to within one standard deviation of its 100-day moving average. Per Schaeffer's Senior Quantitative Analyst Rocky White's most recent study, INMD saw six similar signals in the past three years, and was higher one month later 83% of the time, averaging a 14.2% rise. A similar move from its current perch of $34.68 could place the security slightly above that $39 ceiling.
A short squeeze could keep the wind at the stock's back. Short interest is down 10.8% in the last two reporting periods. However, the 4.68 million shares sold short still account for 6.7% of the stock's available float.
Now looks like a good opportunity to weigh in on the security's next move with options. This per its Schaeffer's Volatility Index (SVI) of 54%, which sits in the low 6th percentile of readings from the past year. In simpler terms, options traders are currently pricing in low volatility expectations.