Williams-Sonoma Stock Cools Off After Hitting Fresh Highs

WSM is ripe for bull notes right now

Digital Content Manager
Jun 18, 2020 at 4:01 PM
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The shares of Williams-Sonoma, Inc. (NYSE: WSM) are down 0.9% to trade at $85.96 this afternoon. The stock surged higher earlier today, hitting a five-year high of $88.13, right on the heels of a four-day win streak. A broader look shows an impressive rally for WSM. Since its 10-year bottom in mid-March, the equity has added over 230.5%, trouncing its previous highs at the $75 mark late last month. The 20-day moving average is also keeping the wind at the security's back, with several pullbacks neatly captured during the past few months. 

It's worth noting that WSM is just on the cusp of being overbought. The equity's 14-day relative strength index (RSI) of 68 indicates that a short-term breather may be in the cards for the retail stock.

On the other hand, the door is wide open for analyst upgrades and/or price-target hikes. Just five of the 17 in coverage consider WSM a "strong buy," compared to nine that say "hold," and three saying "sell" or worse. Meanwhile, the consensus 12-month price target of $77.94 is a 9.3% discount to current levels, meaning the equity could see more price-target hikes in the near future. 

Despite these outsized moves, options are still quite cheap right now. The stock's Schaeffer's Volatility Index (SVI) of 47% sits in the lowest quartile of its annual range. This means the options market is pricing in relatively low volatility expectations of late. What's more, Williams-Sonoma stock's Schaeffer's Volatility Scorecard (SVS) sits high at 86 out of 100, showing that the stock has tended to exceed option traders' volatility expectations during the past year, a good thing for option buyers.

 

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