Buy The Dip on Charles Schwab Stock

SCHW has erased its post-earnings gains from August

Deputy Editor
Sep 7, 2023 at 2:51 PM
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On the charts, Charles Schwab Corp (NYSE:SCHW) has completely erased its mid-August bull gap, and is currently down 30.5% since the start of the year. With the stock now on track for a third-straight day of losses -- last seen down 0.9% to trade at $164.67 -- it poses an attractive entry point for bulls, especially since this dip has placed it within one standard deviation of its 100-day moving average. 

This trendline has been historically bullish for the shares in the past. According to Schaeffer's Senior Quantitative Analyst Rocky White, Charles Schwab stock has run into its 100-day moving average six times in the past three years, after which it was higher one month later 83% of the time, averaging a 6.1% pop. 


An unwinding of pessimism in the options pits could provide tailwinds as well. SCHW's 10-day put/call volume ratio of 2.75 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 92% of readings from the past year. 

Plus, now looks like a good time to weigh in with options. The stock's Schaeffer's Volatility Index (SVI) of 28% stands higher than just 7% of readings in its annual range, implying options players are pricing in low volatility expectations.  


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