ACB was oversold heading into today
One trading day removed from a nasty bear gap, Aurora Cannabis Inc (NYSE:ACB) is attempting a rebound this morning, last seen up 2% to trade at $6.93. This overdue lift comes after the weed company inked growing operations licenses from Health Canada for two outdoor cultivation sites.
Aurora Cannabis stock is fresh off its worst week of 2019. The $7 level, an area that had served as a floor the last three months, has now emerged as possible resistance. Still, ACB is sporting a year-to-date lead of 36% and its 14-day Relative Strength Index (RSI) sits at 28 -- suggesting the shares are oversold and could be due to rebound.
Analysts have remained undeterred by the security's recent slide. Of the seven analysts covering ACB, five rate it a "buy" or better, with zero "sells" on the books. Short sellers though, have continued to pile on. Short interest increased by 4.5% in the two most recent reporting periods, to 85.93 million shares, the most since mid May.
In the options pits, calls have reigned supreme. ACB's 10-day put/call volume ratio of 6.01 on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) means that six calls have been traded for every put in the last 10 days.
Whatever the motive, now is the time to pursue options on the weed stock. Its Schaeffer's Volatility Index (SVI) of 50% ranks in the 28th annual percentile, indicating short-term options are pricing in relatively low volatility expectations at the moment.