Bull Signal Has Never Failed Dell Technologies Stock

Tech stock Dell Technologies Inc (NYSE:DELL) is down 2.7% to trade at $142.62 at last check, headed for its sixth-straight daily loss, though it maintains its 22.5% year-to-date gain. The security has struggled since tapping a Nov. 3, 52-week peak of $168.08, and is slated to report third-quarter results at the end of the month. The shares' run lower could be over soon, too, as they approach a historically bullish trendline.

Specifically, DELL has pulled back to its 50-day moving average. Per Schaeffer's Senior Quantitative Analyst Rocky White, the stock is within 0.75 of the trendline's average true range (ATR) after remaining above it 80% of the time in the past two months. This signal has occurred seven other times in the past 10 years, after which the stock was higher one month later every time with an average 17% gain. A move of similar magnitude would put DELL back around $166.

Short interest is on the rise, up 12.2% in the most recent reporting period. This accounts for 4.2% of the stock's total available float, and at the stock's average pace of trading, it would take short sellers almost two days to buy back these bearish bets.

Despite earnings still being several weeks out, options are priced to sell. Schaeffer's Volatility Index (SVI) of 49% sits in the 20th percentile of annual readings. The security also tends to outperform options traders' volatility expectations, per its Schaeffer's Volatility Scorecard (SVS) of 77 out of 100.