FSLY has pulled back to its 320-day moving average, a historically bullish trendline
Still stinging from its Feb. 15 post-earnings drop of 30.6%, Fastly Inc (NYSE:FSLY) was last seen starting the holiday-shortened week down 5.5% at $14.92. Only a week removed from its Feb. 12 two-year high of $25.87, the stock is now trading at its lowest levels since October.
For those looking to buy in on the dip, however, the recent pullback has FSLY within one standard deviation of its 320-day moving average, a trendline with historically bullish implications. According to Schaeffer's Senior Quantitative Analyst Rocky White, the equity has seen three similar signals in the past three years, after which it was higher one month later each time, averaging an impressive 20% gain.
Fastly stock's 14-day relative strength index (RSI) of 34.3 is nearing "oversold" territory, which is typically indicative of a short-term bounce. Plus, short interest represents 6.5% of the stock's available float, and would take three days to cover at FSLY's average pace of trading.
Calls look like a good way to go. The security's Schaeffer's Volatility Index (SVI) of 59% ranks in the low 9th percentile of its annual range, meaning premium is cheap at the moment.