Industrial machinery concern Fastenal Company (NASDAQ:FAST) is set to report first-quarter earnings before the bell tomorrow morning. Digging into FAST's earnings history, the stock has closed lower the next day in seven of the last eight quarters -- including a 5.8% fall after its most recent earnings release. On average, the shares have swung 4.3% in either direction in the session after the company reported, looking back two years. For Wednesday's trading, the options market is pricing in larger-than-usual 7.9% one-day move, per Trade-Alert.

As far as direction, options traders are heavily bullish ahead of the company's earnings report, with data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) showing FAST with a 10-day call/put volume ratio of 15.32, ranking in the 92nd annual percentile. This suggests calls have been purchased over puts at a much faster-than-usual pace during the past two weeks.

However, some of this recent call buying -- particularly at out-of-the-money strikes -- could be the result of shorts picking up an options hedge before earnings. Short interest rose 10.2% during the most recent reporting period, and now represents 10% of the stock's total available float.

Analysts, meanwhile, remain optimistic toward Fastenal shares. Currently, nine of 12 analysts following FAST consider it worthy of a "strong buy" rating. Just yesterday, in fact, BMO upped its price target on the equity to $57 from $55.

Fastenal stock has picked up 25% over the past nine months, and recently touched a record high of $58.73 on March 16. The machinery stock subsequently fell to the support of its 120-day moving average, and was trading up 1.8% at $54.63, at last check.

After a slow burn to record highs in 2017, the U.S. stock market has been on a roller coaster this year, with volatility ramping up in a big way. As such, the Cboe Volatility Index (VIX) -- also known as Wall Street's "fear gauge" -- kicked off 2018 with a bang, logging its best start to a year ever. Against this backdrop, near-term put open interest on a handful of major equity exchange-traded funds (ETFs) has surged, sending up a stock signal not seen since before the November 2016 presidential election.

Near-the-Money April Puts Prevalent

Specifically, the combined front-month gamma-weighted Schaeffer's put/call open interest ratio (FM-GW SOIR) on the SPDR S&P 500 ETF Trust (SPY), PowerShares QQQ Trust (QQQ), and iShares Russell 2000 ETF (IWM) surged above 6.0 last week -- the most elevated reading since 2011, according to Schaeffer's Quantitative Analyst Chris Prybal. In a nutshell, this indicates that near-the-money put open interest on SPY, QQQ, and IWM handily outweighs call open interest in the April series of options, which expires at next Friday's close.

Previous Option Signals Have Been Bullish

The combined FM-GW SOIR 10-day moving average officially topped 5.0 on March 23, marking its first trip above this threshold since Nov. 3, 2016. Below is how the S&P 500 Index (SPX) has performed after previous such highs in this metric, looking back to 2008. Notice that there were no signals in 2013, 2014, or 2017.

One week after a signal, the SPX has gone on to average a return of 2.1% -- about 10 times its average anytime one-week return of 0.2%, looking at data since 2008. Two weeks out, the S&P was up 3.3% -- again, roughly 10 times the norm -- with a positive rate of 88%. It's a similar story looking all the way out to a year after a signal, with the SPX averaging a gain of 20.3% -- more than twice its average anytime return of 9.8%. Plus, the index was higher 100% of the time both six and 12 months after these options signals.

'Fear Index' Tends to Drop After Signals

As you might expect, the VIX has plummeted after the combined SPY/QQQ/IWM FM-GW SOIR average tops 5.0. The "fear index" suffered an average loss at every checkpoint up to a year later, compared to average anytime gains. Only at the one-year marker has the VIX averaged an anytime loss of 1.8% -- though its post-signal loss of 50.2%, on average, far overshadows that. In fact, the VIX was higher 0% of the time six and 12 months out, compared to 40% and 42% win rates, respectively, anytime since 2008.

In conclusion, there's an abundance of near-the-money put open interest on the SPY, QQQ, and IWM -- more than we've seen in over a year. As Schaeffer's Senior V.P. of Research Todd Salamone noted on Monday, heavy SPY put open interest could translate into an options-related floor for stocks in the near term. What's more, after previous instances when the combined front-month gamma-weighted SOIR of the aforementioned ETFs went north of 5.0, the stock market tended to rocket higher, while the VIX plummeted.

Any basic stock charting software comes with some standard technical analysis indicators including the RSI, MACD, moving averages, etc. I rarely see anyone try to measure their results, though. Which one works best? This week I’m going to try to answer that question. I’ve done this study in the past, but environments change, and indicators fall in and out of favor. Hopefully we’ll get some insight on which technical analysis tool has been the most consistent over the long term and which one is hot (or not) right now.

Favorite Stock Market Indicators

Below are some of the indicators that I looked at. Different traders use these indicators differently and/or in combination with other indicators. Perhaps that is why no one else tries to quantify their performance. I am taking a very basic approach to what I call a "buy signal."

• RSI: The RSI (Relative Strength Indicator) is an oscillator that ranges from zero to 100. A low-number reading suggests a stock is oversold and ready to bounce. A typical buy level for this indicator is 30. Because stocks can stay oversold for an extended period of time, the buy signal is defined as when the RSI goes from below 30 to above 30. In other words, it was oversold and now heading upward.
• MACD: The MACD (Moving Average Convergence/Divergence) is calculated using the difference in two moving averages for a stock. A moving average of that difference is then used and called the signal line. A common buy signal is generated when the MACD crosses above that signal line.
• Golden Cross: A golden cross is when a shorter-term moving average crosses above a longer-term moving average. In the analysis below, I used a 50-day and 200-day moving average.
• Moving Average Crossover: This is simply looking at the stock price crossing above a certain moving average. I compared returns after the price crossed above the 50- and 200-day moving averages.
• Bollinger Bands: These use a moving average, and then bands are placed two standard deviations above and below the moving average. When the stock price touches the lower band, it is often considered oversold and a bounce in the stock price is expected.
• Moving Average Pullbacks: For a stock on the rise, some traders might wait for a pullback to enter the position. One popular way to define a pullback -- which is then a buy signal -- is when the stock falls to within a range of a rising moving average. I consider pullbacks to the 50-day and 200-day moving average.

Which Stock Signal Preceded the Best Returns?

For the study below, I looked at S&P 500 stocks and went back five years. I found the number of times a stock "signaled" for each indicator. The first table below shows the average and median stock returns over the next month of trading after a signal and also the percentage of time the return was positive.

I bolded the best two data points in each column and colored the worst two red. A quick glance shows stocks pulling back to their 200-day moving average performed well over the next month. That indicator showed an average return of 1.68% going forward, which was slightly below the return after a stock hit the lower Bollinger Band. Meanwhile, the percent positive after a pullback to the 50-day moving average was the best of all the indicators.

The golden cross indicator was the worst performing indicator by average return, median, and percent positive. The stock crossing its 200-day moving average was also an indicator that underperformed compared to the others.

This next table is like the one above except it only considers the signals from the past 12 months. The indicators can perform differently in different trading environments, so this tells us what has and has not worked more recently. Pullbacks to those two moving averages -- the 50 day and 200 day -- have been the best indicators recently.

The Bollinger band indicator, which had the highest average return over the past five years, ranked only fifth out of eight indicators when looking at the more recent returns. Moving average crossovers and, again, the golden cross indicator have not done well over the past 12 months.

Best Stocks After 50-Day, 200-Day Pullbacks

Here’s a list of stocks that have recently signaled a pullback to their 50-day or 200-day moving average. The tables are sorted by date and then how well they’ve done over the past 52 weeks. This might be a good list to begin with if you’re looking for short-term trades. (Note that it includes signals through Monday, so it does not show stocks that signaled yesterday).

While much of the stock market has been struggling over the past couple of months, a pair of retail stocks have been quietly making new highs. Specifically, American Eagle Outfitters (NYSE:AEO) and Abercrombie & Fitch Co. (NYSE:ANF) stocks have been outperforming in a big way -- and it looks like short-term options are on sale for both AEO and ANF.

Upgrades Overdue for Soaring AEO Shares

American Eagle stock has advanced 13.5% in 2018, with pullbacks contained by its 80-day moving average. Further, AEO yesterday notched a fresh five-year high of $21.60. The shares were last seen 0.5% lower at $21.33.

Despite the equity's outperformance, half of the analysts following AEO maintain tepid "hold" or "strong sell" ratings. Not to mention, the average 12-month price target among analysts is $20.35 -- a discount to American Eagle shares' current price. As the stock extends its advance, a round of upgrades or well-deserved price-target hikes could lure more buyers to the bandwagon.

Recent options buyers have picked up AEO puts over calls at a faster-than-usual clip. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 2.18 is in the 83rd percentile. An unwinding of pessimism in the options pits could also add fuel to the security's fire.

As alluded to earlier, AEO is one of the few stocks flirting with new highs while simultaneously sporting attractively priced options. The equity's Schaeffer's Volatility Index (SVI) of 36% is higher than just 12% of all others from the past year, suggesting American Eagle's near-term options are pricing in historically low volatility expectations at the moment.

Abercrombie & Fitch Stock Could Enjoy a Short Squeeze

Abercrombie & Fitch stock touched a nearly two-year high of $28.45 earlier today, but was last seen fractionally lower at $28.09. ANF shares have more than tripled since their mid-July lows, climbing steadily higher atop their 10-week moving average. In fact, in 2018 alone, the stock has surged more than 61% despite broad-market headwinds, with help from an early March earnings beat.

A short squeeze could add fuel to ANF's fire, too. Short interest represents more than 20% of the equity's total available float, or more than a week's worth of pent-up buying demand, at ANF's average pace of trading.

Likewise, a round of overdue upgrades could also propel the retail stock higher. Despite Abercrombie stock's surge in the face of a broader stock market pullback, only three of 14 analysts deem the security worthy of a "buy" or better endorsement. And the average 12-month price target of $22 represents a whopping 21.6% discount to ANF's current share price.

As with Aeropostale, Abercrombie options traders have picked up long puts over calls at an accelerated clip during the past two weeks. ANF's 10-day ISE/CBOE/PHLX put/call volume ratio of 2.89 is in the 86th percentile of its annual range. A mass exodus of option bears could translate into a tailwind for the shares.

Traders looking to speculate on Abercrombie & Fitch stock's near-term trajectory can do so at a relative discount, though. The equity's SVI of 51% is in just the 17th percentile of its 12-month range.

Biotechs struggled in the latter half of March, with the iShares Nasdaq Biotechnology ETF (IBB) shedding more than 13% from its mid-March high of $115.60 to its early April lows just north of $100. The shares have since bounced off the century mark and are now trading back above their 10-day moving average. Individual drug stocks Nektar Therapeutics (NASDAQ:NKTR) and Zoetis Inc (NYSE:ZTS) have pulled back to key trendlines, too, and could be headed even higher, if history is any guide.

Nektar Therapeutics Stock Bounces from 50-Day Trendline

Nektar Therapeutics stock topped out at a record high of $111.36 on March 12, before pulling back to its 50-day moving average -- the best buy signal over the past year, according to Schaeffer's Senior Quantitative Analyst Rocky White. More specifically, S&P 500 Index (SPX) stocks that have retreated back to this trendline in the last 12 months were 1.37% higher, on average, one month later.

More broadly, NKTR shares are up 70.9% year-to-date to trade at $101.93, yet options traders have been buying to open puts over calls at a quicker-than-usual clip in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.18 ranks in the 90th annual percentile. While some of this activity could be bearish, it's likely shareholders are initiating options hedges, too.

Outperforming Zoetis Stock Overdue for Upgrades

Zoetis stock also pulled back to its 50-day trendline recently, after the security hit an all-time peak of $85.73 on March 21. More recently, the shares were trading at $83.06, up 15.3% so far in 2018.

Part of this upside has been fueled by short sellers. Short interest has been cut in half year-to-date to 3.8 million shares. While this source of buying power has been nearly depleted -- it would take fewer than two sessions to cover the remaining shares, at the average pace of trading -- six of 16 analysts maintain a tepid "hold" rating on ZTS stock. Upgrades could create bigger tailwinds for the equity.

Mylan N.V. (NASDAQ:MYL) is doing well today, up 1.5% to trade at $40.97 after receiving an upgrade to "outperform" from "market perform" at Leerink. After starting 2018 off strong with an annual high of $47.82 on Jan. 23, the drug stock has struggled. If history is any guide, though, it could be time to bet on Mylan's next leg higher.

Specifically, the shares have pulled back within one standard deviation of their ascending 160-day moving average. According to Schaeffer's Senior Quantitative Analyst Rocky White, after the previous three times MYL stock pulled back to this moving average after spending a significant amount of time above it, it averaged a 21-day gain of 10.46%, and was higher all three times. A move of similar magnitude this time around would have the stock back above $45.

A rally in the coming months could send even more short sellers scrambling. Short interest has fallen by 24% since mid-January, but at MYL's average daily trading volume, it would take more than four days for the shorts to cover their bearish bets.

Options traders appear to be optimistic, judging by the stock's 10-day call/put volume ratio of 11.11 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This reading ranks in the 100th percentile of its annual range, indicating long calls have rarely been more popular in the past year, relative to puts.

Digging deeper, the weekly 4/13 42-strike call has seen the largest increase in open interest during this time frame. Data from the major options exchanges shows substantial buy-to-open activity back on Tuesday, so traders are hoping the stock jumps above $42 by tomorrow's close, when the options expire.

Concerns about a trade war with China, the Facebook (FB) data scandal, a presidential tirade against Amazon (AMZN), and geopolitical tensions in the Middle East likely contributed to another drop in bullish sentiment last week. Specifically, the latest Investors Intelligence (II) survey showed the number of self-identified bulls fell to its lowest point since October 2016, sending up a second rare sentiment signal of 2018. However, if history is any indicator, these sidelined traders could jump back into stocks over the next few months.

Former Bulls Now Expecting a Correction?

The number of II bulls dropped 5.4 percentage points to 42.2% last week, marking another three-week drop in optimism. Meanwhile self-identified bears edged up 0.5 percentage point to 18.6% -- the highest since mid-September -- and advisors expecting a correction crept 3.2 percentage points higher to 36.9%, marking the highest since May 2016.

The bulls-minus-bears line is now at 23.6%, marking its lowest point since November 2016, according to Schaeffer's Senior Quantitative Analyst Rocky White. The line decreased for a fourth consecutive week -- something we saw in February, amid the stock market correction. Prior to that, the II bulls-minus-bears line hadn't dropped four straight weeks since September 2016. The only other year in which this signal sounded twice was 2013, looking at data since 2010.

Short-Term Pains, Long-Term Gains for SPX?

These sentiment signals have preceded short-term weakness for the S&P 500 Index (SPX). Looking at previous four-week drops in the II bulls-minus-bears line since 2010, the SPX went on to average a one-week loss of 0.95%, and was higher just 50% of the time. That's compared to an average anytime one-week gain of 0.22%, with a 59.2% win rate. A week after the February signal, the S&P was down 2.04%.

One month later, the S&P was down 1.23%, on average, and higher just 37.5% of the time. That's compared to an average anytime gain of 0.87%, with a win rate of 65%. A month after the last signal, in fact, the SPX was 5.79% lower.

However, longer-term, four consecutive drops in the II bulls-minus-bear line has preceded stronger-than-usual returns for the S&P 500. Three months later, the index was up 4.84%, on average, compared to 2.94% anytime. Six months later, the SPX was higher by 7.81%, on average, compared to 5.93% anytime. At both points the S&P was up a better-than-usual 85.7% of the time after a signal.

In conclusion, a four-week slide in the Investors Intelligence bulls-minus-bears line tends to be a self-fulfilling prophecy for the stock market, with the S&P typically enduring near-term headwinds. However, if recent history is any indicator, buyers could eventually rush back in from the sidelines, helping the index reclaim some ground -- and then some -- over the next six months. In any event, the recent spate of headline-driven volatility creates some opportunities for premium sellers and day traders alike, per Schaeffer's Senior V.P. of Research Todd Salamone.

Bank stocks are mostly higher today, after BlackRock (BLK) kicked off earnings season for the finance community with a win. Huntington Bancshares Incorporated (NASDAQ:HBAN) stock is no exception, muscling higher in afternoon trading. What's more, HBAN shares just flashed a historical "buy" signal on the charts, suggesting now could be an opportune time to jump in on the equity ahead of the company's own earnings report later this month.

After touching a post-financial-crisis high of $16.60 in mid-March, Huntington stock slipped with the broader equities market. The shares pulled back to support in the $14.40 area, which represents a 50% Fibonacci retracement of their rally from their August lows to the aforementioned high. Further, HBAN dipped to within one standard deviation of its 160-day moving average, after a lengthy stretch above this trendline -- a chart pattern that's preceded healthy gains for HBAN in the past.

According to data from Schaeffer's Senior Quantitative Analyst Rocky White, after the last four pullbacks to this moving average, HBAN was higher one month later 100% of the time, averaging a gain of 6.78%. At last check, the security was up 2.2% at $14.97. A similar pop over the next month would put the banking stock back around $15.96.

That month will also include Huntington Bancshares' next earnings report, slated for release on Tuesday, April 24. A stronger-than-expected earnings showing could shake loose some of the new HBAN short sellers, as short interest surged 22.4% during the past two reporting periods.

And while HBAN options volume tends to run light on an absolute basis, an unwinding of pessimism in the options pits could still drive the shares higher. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio of 1.01 is in the 90th percentile of its annual range, suggesting recent buyers have picked up HBAN puts over calls at a faster-than-usual clip during the past two weeks.

Tomorrow is Friday the 13th -- often considered to be the unluckiest of days. But does that hold up for the stock market? According to our research, the S&P 500 Index (SPX) could, in fact, take a dip (insert Camp Crystal Lake joke here), if past is prologue -- and blue-chip stocks UnitedHealth Group Inc (NYSE:UNH) and Apple Inc. (NASDAQ:AAPL) could also be in danger. Further, Goldman Sachs Group Inc (NYSE:GS) stock could struggle ahead of the company's turn in the earnings confessional next week.

Ill-Fated Day for S&P?

Since 2010, the SPX has ended Friday the 13th higher just 42.9% of the time -- that's compared to an anytime daily win rate of 54.6%, according to Schaeffer's Senior Quantitative Analyst Rocky White. On average, the stock market index has lost 0.19% on this day, compared to an average anytime daily gain of 0.05%. Still, it's worth noting that the S&P ended this day higher on both Fridays the 13th in 2017.

Beware These Stocks on Friday the 13th

Below are the 25 worst stocks to own on Friday the 13th, looking at returns since 2010. Dow stock UnitedHealth Group is one of only two SPX stocks with a win rate of just 14% -- the lowest of all. Further, UNH stock has averaged a loss of 0.31% on this date. Fellow blue chip Apple stock has racked up an even steeper average Friday the 13th loss of 0.81%, and has ended the day higher just 29% of the time since 2010.

Goldman Sachs stock, meanwhile, has also ended the day higher only 29% of the time, averaging a one-day loss of 0.6%. However, with big bank earnings from sector peers JPMorgan Chase & Co. (JPM) and Citigroup Inc (C) slated for release tomorrow, it's likely GS shares will move in step with the rest of the financial sector. And the stock's short-term trajectory next week will be determined by Goldman's own earnings release, slated for Tuesday, April 17.

Caterpillar Stock Could Buck the Trend

As far as stocks that could defy the broad market's bad luck, blue chip Caterpillar Inc. (NYSE:CAT) shares tend to hold up well. CAT stock has ended Friday the 13th higher 71% of the time since 2010, averaging a gain of 0.25%.

Earnings season is underway, and bank name Bank of America Corp (NYSE:BAC) will kick things off next week, as it's scheduled to report first-quarter earnings before the open Monday. BAC stock will try to avoid the fate of sector peers JPMorgan (JPM), Wells Fargo (WFC), and Citigroup (C), which have turned lower today in the wake of their quarterly reports. Let's take a closer look at BAC's earnings history below.

BAC stock has had a positive earnings reaction in five of the last eight quarters. In the last two years overall, the equity has averaged a 1.1% move the day after earnings, regardless of direction. This time around, the options market is pricing in a larger-than-usual 3.7% one-day move, per Trade-Alert.

Looking closer at the charts, Bank of America shares touched a multi-year high of $33.05 a month ago, overtaking their 20-day moving average for the first time in three weeks. Today, however, the stock is down 2.1% to trade at $29.79, breaching this trendline once more.

In the options pits, calls have become more popular in the past two weeks. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows a 10-day call/put volume ratio of 4.57, which ranks in the elevated 83rd percentile of its annual range.

Investing giant Charles Schwab Corporation (NYSE:SCHW) is set to report its first-quarter earnings early next week. SCHW has finished lower the day after earnings in each of the past six quarters, but typically not by a lot -- the stock's average post-earnings daily price move is 1%, on average, over the last eight quarters. This time around, the options market is pricing in a larger-than-usual 3.3% next-day move, per Trade-Alert.

In fact, 30-day at-the-money implied volatility on SCHW options stands at 31.1%, in the 93rd annual percentile. And Schaeffer's Volatility Index (SVI) -- which is currently measuring Schwab's front-month April implieds -- weighs in at 36%, in the elevated 68th percentile of its annual range.

Charles Schwab stock has declined more than 11% since hitting an all-time intraday high of $58.11 in mid-March, and today, the shares are continuing a three-week stint below former support at their 80-day moving average. The $50 level, which was initially toppled by the equity's Dec. 4 bull gap, has emerged as a foothold for the shares over the past few weeks. SCHW is down 0.9% at $51.29, at last check -- hovering just below its April 1999 high and its year-to-date breakeven level.

Ahead of earnings, options traders have been bracing for more downside. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), SCHW's 10-day put/call volume ratio of 1.75 ranks in the 85th annual percentile -- meaning puts have been bought to open over calls at a faster-than-usual clip.

While volatility expectations are looking a little frothy in advance of the firm's first-quarter results, it's worth noting that Charles Schwab stock has handily rewarded premium buyers over the past year. SCHW currently sports a Schaeffer's Volatility Scorecard (SVS) of 78 out of 100, meaning the stock has tended to register bigger price swings than its options premiums have reflected over the past 12 months.

ImmunoGen, Inc. (NASDAQ:IMGN) is struggling today, down 2.3% to trade at $10.24. The biotech stock raced to a two-year high of $13.41 on March 26, but promptly pulled back in the past two weeks. If history is any guide, though, it could be time to bet on ImmunoGen's next leg higher.

Specifically, the shares have pulled back within one standard deviation of their ascending 80-day moving average. According to Schaeffer's Senior Quantitative Analyst Rocky White, after the previous four times IMGN stock pulled back to this moving average after spending a significant amount of time above it, it averaged a whopping 21-day gain of 21.81%, and was higher three-quarters of the time. A move of similar magnitude this time around would put the stock back near multi-year highs.

A short squeeze could provide more tailwinds for the equity. Short interest fell by nearly 19% in the most recent reporting period, but the 11.05 million shares sold short represent 12% of the IMGN's total available float.

Although IMGN has added 59% already in 2018, analysts have been hesitant to come aboard. Of the 10 brokerages covering the security, four still rate it a "hold" or "strong sell." A resumed climb higher in the next few weeks may prompt analysts to re-think their bearish stance.

Despite the biotech stock's recent uptrend, the security remains plagued by pessimism in the options pits, although volume has been light on an absolute basis. The equity's Schaeffer's put/call open interest ratio (SOIR) of 3.23 ranks in the 94th percentile of its annual range, suggesting near-term traders have rarely been more put-biased in the past year. An unwinding of pessimism in the options pits could add fuel to the stock's fire.