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The 200-day moving average could fuel the apparel stock's gains
Abercrombie & Fitch Co (NYSE:ANF) stock is 2.3% higher to trade at $133.92 at last check, bouncing off a familiar floor at the $130 level following a post-earnings pullback. Shares already boast a 52.2% lead for 2024, and an even better 151.8% year-over-year lead. Plus, a historically bullish trendline could help the equity run even higher.
According to the latest data from Schaeffer's Senior Quantitative Analyst Rocky White, Abercrombie & Fitch stock is within one standard deviation of its 200-day trendline. Per White, four similar pullbacks occurred in the last three years. In the month after 75% of these signals, ANF averaged an 8.8% gain. A similar move would put the shares back above the $145 level.
Short sellers are already hitting the exits, but a continued unwinding of pessimism could keep tailwinds blowing for ANF. Short interest fell 13.3% in the last two reporting periods, yet the 3.70 million shares sold short still makes up 7.4% of the stock's available float.
For those looking to bet on the stock's next move higher, options are an affordable route. ANF's Schaeffer's Volatility Index (SVI) of 52% ranks in the relatively low 18th percentile of its 12-month range, meaning options traders are pricing in low volatility expectations right now.
It's also worth noting the security's Schaeffer's Volatility Scorecard (SVS) of 91 out of 85 shows that it has exceeded option traders' volatility expectations over the last year.