More Record Highs in Sight for Retail Stock

WSM looks ripe for a short squeeze too

Deputy Editor
Apr 1, 2024 at 1:02 PM
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Williams-Sonoma Inc (NYSE:WSM) stock notched a series of record highs after its March 13 earnings report resulted in a massive bull gap on the charts. Looking slightly further back, WSM gained in seven of the last eight weeks, and is now up more than 162% over the last 12 months.

Last seen up 0.4% at $318.77 and topping out at an all-time high of $319.78 earlier today, investors shouldn't be calling the top just yet, because a flashing bull signal suggests there's still room for Williams-Sonoma stock to run higher.   

WSM Chart April 012024

WSM's recent highs come amid historically low implied volatility (IV), as its Schaeffer's Volatility Index (SVI) of 20% ranks in the low 1st percentile of its annual range. According to Schaeffer's Senior Quantitative Analyst Rocky White, WSM has seen six signals over the past five years when it was trading within 2% of its 52-week high, while its SVI sat in the 20th percentile of its annual range or lower, as is the case now.

Shares were higher one month later 83% of the time after these signals, averaging an 7.6% gain. A move of similar magnitude would place the stock at a new record high near the $343 mark. 

The security also looks ripe for a short squeeze. The 6.20 million shares sold short now account for 10.3% of WSM's available float, or nearly six days' worth of pent-up buying power.

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