Upgrade Keeps IRBT Stock Moving Higher

An unwinding of pessimism could keep the wind at the stock's back

Jan 16, 2020 at 10:12 AM
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The shares of iRobot Corporation (NASDAQ:IRBT) are sporting a 7.7% gain this morning to trade at $57.51, putting them on pace for their best close since October and a second straight finish atop the 100-day moving average after roughly nine months below the trendline. Today's upside is coming thanks to an upgrade to "market perform" from "underperform" at Raymond James.

But IRBT stock has been on the rise before today, too, since this would mark a third straight winning session for the electronics concern. The shares are trying to recover from a disappointing 2019, and more bullish attention from analysts could keep the momentum going. For instance, eight of the 10 covering brokerage firms have "hold" or "strong sell" ratings on the security, leaving the door wide open for more upgrades to come through going forward.

And even though interest in call options has picked up somewhat recently, short-term traders do remain put-skewed, based on the Schaeffer's put/call open interest ratio (SOIR) of 1.02. As such, further gains on the charts could prompt some of these put traders to close their positions, which would likely help iRobot stock.

Then there's short interest, which remains extremely elevated. Almost nine days' worth of buying power is held by IRBT short sellers, based on average daily trading volumes, hinting at plenty of buying power that's on the sidelines and could come in to push the shares higher.

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