Could the Glu Mobile Inc. (GLUU) Rally Have Legs?

Glu Mobile Inc. (GLUU) has nearly doubled in value in less than a month

Feb 26, 2016 at 1:36 PM
facebook X logo linkedin

After popping to a year-to-date high of $4 on reports that Tencent Holdings Limited increased its stake in the company, video game maker Glu Mobile Inc. (NASDAQ:GLUU) is trading a slight 0.5% lower at $3.90 today. After falling to a four-year low of $1.98 earlier this month, GLUU has nearly doubled in value -- with a little help from Taylor Swift and Kendall and Kylie Jenner -- on pace for a monthly gain of more than 75%. But option traders have yet to buy the stock's impressive rally, favoring bearish bets as the shares continue their journey north.

GLUU has outpaced the broader S&P 500 Index (SPX) by nearly 73 percentage points during the past month, and is poised to notch a second straight close above its 160-day moving average -- a feat not accomplished since early August. The equity's 14-day Relative Strength Index of 74 now puts it firmly in oversold territory.

But at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have barely begun backing off their pessimistic bets, with GLUU's 50-day put/call volume ratio of 0.55 still higher than 96% of all readings in the past year.

Short sellers have been betting heavily against the stock, as well. Short interest on the security rose by nearly 21% during the most recent two-week reporting period, and currently accounts for about 18% of the GLUU's total available float.

Glu Mobile Inc. (NASDAQ:GLUU) could run into a speed bump in the aforementioned $4 region, which acted as support for a healthy portion of 2015. But if traders start believing in GLUU's impressive rally, an unwinding of bearish sentiment could help the stock continue its trek higher.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI