DELL has pulled back to a historically bullish long-term trendline
Dell Technologies Inc (NYSE:DELL) stock is down 1.4% to trade at $127.37, set to snap a five-day win streak as tech sector headwinds weigh. The Top Stock Pick of 2025 has taken a 10% haircut in the fourth quarter, and is 24% off its Nov. 3, 12-month high of $168.08. The upside is that this pullback has DELL testing a long-term trendline that's historically bullish.
The trendline is DELL's 12-month moving average, a trendline it has closed above in 80% of the last 20 months. According to Schaeffer’s Senior Quantitative Analyst Rocky White, this has happened nine times over the last 20 years, after which the equity was higher one month later only 44% of the time, but averaging a 25.8% jump. Three months out, DELL's average return was 56%, with a win rate that was positive more than half the time.
A short squeeze could keep the rally sustained. Short interest is up 11.1% in the most recent reporting period, and the 20.60 million shares sold short account for 6.6% of DELL's total available float.
Short-term put traders have been out in droves, too, per the stock's Schaeffer's put/call open interest ratio (SOIR) of 1.23, which ranks in the 99th percentile of its annual range. An unwinding of these bearish bets could generate additional tailwinds.
DELL options are affordably priced, too. This is per the stock's Schaeffer's Volatility Index (SVI) of 42%, which sits higher than just 11% of readings from the last year. Additionally, with a of 83 out of 100, the security has consistently realized higher volatility than its options have priced in.