This historically bullish signal has averaged a 35% return for REAL
RealReal Inc (NASDAQ:REAL) stock was last seen up 2.3% to trade at $16.84 at last check. The luxury consignment stock earlier surged to a new four-year high of $16.90 amid long-term support from the 20-day moving average. The stock could extend its rally too, thanks a historically bullish indicator that is now flashing.
According to data from Schaeffer’s Senior Quantitative Analyst Rocky White, there have been four instances over the past five years when REAL traded within 2% of its 52-week high, while its Schaeffer’s Volatility Index (SVI) sat in the 20th percentile of its annual range or lower. That setup is in place again today, as the security’s current SVI of 67% sits in the 18th percentile of its annual range.
The equity was higher one month later 75% of the time after those signals, averaging a massive 35% gain. From their current perch, a similar move would place the shares at $22.73 --- their highest level since May 2021.
Short sellers are running for the exits, with short interest down 15.8% over the last two reporting periods. The 24.08 million shares sold short still make up 23.8% of the stock's available float, however, or more than six days' worth of pent-up buying power. In other words, REAL looks ripe for a short squeeze.