Stitch Fix Stock Eyes Key Chart Support

The $90 level is containing a breather today

Assistant Editor
Feb 1, 2021 at 10:26 AM
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Last week, we highlighted Stitch Fix (NASDAQ:SFIX) as one of our top picks for 2021. Today, the stock is in the spotlight after a couple analyst adjustments. Baird downgraded SFIX to "neutral" from "outperform," in a "tactical downgrade on valuation" but remains bullish on the equity long-term. In the same vein, Stifel cut the stock to "hold," from "buy." However, both analysts also raised their price targets -- Baird to $85 and Stifel to $83. 

At last check, the stock was trading down 4.8% at $90.82. Continuing its breather on the charts after its Jan. 27 record high of $113.75, SFIX is now contending with the $90 level after breaching its 10-day moving average. But so far in 2021, even amid today's pullback, the stock is already up 54.8%. 

Over in the options pits, puts have been overwhelmingly popular, leaving plenty of pessimism that could unwind and push the security back higher. SFIX's 50-day put/call volume ratio of 1.03 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than all other readings in its annual range, meaning long puts have been picked up at their fastest rate all year in the last 10 weeks. Today is showing similar sentiment, with 997 puts across the tape already in comparison to 505 calls. 

Meanwhile, though short interest has been falling off, it still accounts for 39.3% of Stitch Fix stock's available float. In other words, it would take nearly six days to buy back these bearish bets at the stock's average pace of trading. 

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