A historically bullish signal could boost VRT
This commentary first appeared on Forbes Great Speculations, where Schaeffer's Investment Research is a regular contributor, on Wednesday, Dec. 6.
Vertiv Holdings Co (NYSE:VRT) stock reached an all-time high of $45.98 today, with support from its 20-day moving average, which has been in place since late October. Though the security was last seen trading lower, it still sports a 226.3% year-to-date lead, and could conquer more records in the days ahead thanks to a historically bullish signal.
Vertiv stock's recent peak comes amid historically low implied volatility (IV), which has been a bullish combination in the past. Per Schaeffer's Quantitative Analyst Rocky White, there were six other signals over the past five years when VRT was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) stood in the 20th percentile of its annual range or lower.
This is the case with the stock's current SVI of 44%, which stands in the 17th percentile of annual readings. The shares were higher one month later 83% of the time, averaging a 6% rise. From its current level, a move of similar magnitude would place the stock at a fresh peak of $47.30.
It's also worth noting that the equity has tended to exceed volatility expectations on a 12-month basis, per its elevated Schaeffer's Volatility Scorecard (SVS) of 78 out of 100.