SIG is clinging onto a modest year-to-date lead despite recent losses
Signet Jewelers Ltd (NYSE:SIG) stock is up 1.1% at $70.24 this afternoon, and still sports a modest year-to-date lead, despite shedding 11.4% over the last three months. The $67 region contained a pullback from the $80 level, and the equity is now trading near a trendline with historically bullish implications, which may help it erase some of these recent losses.
The trendline in question is SIG's 160-day moving average.
According to Schaeffer's Senior Quantitative Analyst Rocky White's last study, the equity saw two similar signals during the past three years, and was higher one month later both times, averaging a 5.9% gain. A comparable move would place
Signet Jewelers stock back above the $74 level.
Short sellers are firmly in control, with the 5.29 million shares sold short now making up 12.1% of the security's available float. Should some of these shorts start hitting the exits, SIG could surge even higher.
Options traders have favored puts over the past 10 weeks, per SIG's 50-day put/call volume ratio of 2.09 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks higher than 91% of annual readings. In other words, an unwinding of bearish sentiment could result in even more tailwinds for the shares.
Now looks like an ideal opportunity to speculate on the security's next move with options. Signet Jewelers stock's Schaeffer's Volatility Index (SVI) of 44% sits in the 8th percentile of readings from the past 12 months, suggesting options are currently affordably priced.