Short interest has been building
Grocery store chain Albertsons Companies Inc (NYSE:ACI) is 3% lower to tr, extending its long-term choppy price action on the charts. The shares have struggled since hitting a 12-month high of $23.20 on April 3, and are now clinging to their 5% year-to-date gain. More losses may be in store, too, as the equity nears a historically bearish trendline.
Per Schaeffer's Senior Quantitative Analyst Rocky White, ACI is now within 0.75 of the 200-day moving average's 20-day average true range (ATR), after remaining below it 80% of the time in the last two weeks and in 80% of the last 42 trading sessions.
This signal has occurred six times in the past 10 years, after which the security was lower one month later 60% of the time, averaging a loss of 9.9%. From its current perch, a move of similar magnitude would place Albertsons stock at the lower end of $16, dangerously close to its Jan. 7, four-year low of $15.85.
Options are looking affordable for those looking to bet on ACI's next move. This is per the stock's Schaeffer's Volatility Index (SVI) of 27% that stands higher than 22% of all other readings from the past year, implying near-term option traders are pricing in relatively low volatility expectations.