This Bull Signal Has Never Failed Nutanix Stock

Options traders are pricing in relatively low volatility expectations right now

Deputy Editor
Apr 3, 2024 at 12:23 PM
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Shares of cloud computing firm Nutanix Inc (NASDAQ:NTNX) are rebounding this afternoon, last seen 3.8% higher at $63.44. The stock erased 4.2% last week and fell 1.9% during yesterday's trading, pulling away from its March 8 record high of $66.99. Today's pop looks like it could be the beginning of a longer-term surge higher, if history is any indicator.

The recent pullback put NTNX within one standard deviation of its 50-day moving average, after a lengthy stretch trading north of this trendline. Over the last three years, five similar pullbacks occurred, all of which resulted in the stock moving higher over the next month, per Schaeffer's Senior Quantitative Analyst Rocky White. Nutanix stock averaged a one-month pop of 12%, so a move of similar magnitude would put it at a new all-time high above the $71 area.

NTNX Chart April 032024

For anyone considering speculating on a NTNX bounce with call options, now is a good time to do so. The stock has a Schaeffer's Volatility Index (SVI) of 41%, which ranks in the 26th annual percentile. This reveals that unusually low volatility expectations are being priced into front-month options for the software stock.

 

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