A historically bullish combination is flashing for TECK
Class B shares of mining and mineral development company Teck Resources Ltd (NYSE:TECK) might be 0.5% lower at $51.46 this afternoon, but they're hovering near yesterday's intraday high of $52.45 -- the stock's highest mark since May 2011. With six wins in the last eight sessions, TECK boasts a healthy 21.8% year-to-date lead, and history suggests that a bounce higher could be in the fold.
Specifically, the equity's recent peak comes amid historically low implied volatility (IV), which has been a bullish combination for Teck Resources stock in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there were two other times in the past five years when the stock 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 now the case with TECK's SVI of 31%, which sits in the low 17th percentile of its 12-month range.
White's data shows that one month after these signals, the stock was higher, averaging a 14.21% return for that time period. From its current perch, a move of similar magnitude would put Teck Resources stock at around $58.75.