Shake Shack Announces China Expansion Plans

Shake Shack stock is pacing for its third-straight win

Assistant Editor
Jun 23, 2021 at 10:29 AM
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Shake Shack (NYSE:SHAK) recently announced plans to expand its footprint of 16 restaurants in China by opening 10 more locations, continuing toward its goal of having 79 restaurants in the region by 2031. SHAK is responding well to the news, last seen up 1.3% to trade at $97.60.

On the charts, a May 7 bear gap sent Shake Shack stock below the $100 mark, an area the equity has managed to close above just twice in the time since. With support from the 20-day moving average, SHAK is pacing for its third-straight day of gains. Longer term, the security is up 15.9% in 2021.

Meanwhile, there's an upbeat sentiment in the options pits, where calls are preferred. This is per SHAK's 50-day call/put volume ratio of 2.18 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 85th percentile of its annual range. Short-term option traders are echoing this optimism, having never been more call-biased, according to the security's Schaeffer's put/call open interest ratio (SOIR) of 0.53, which sits in the lowest percentile of the last 12 months. 

Those wanting to get in on Shake Shack stock's next move with options are in luck, as premiums can be had for a steal at the moment. The security's Schaeffer's Volatility Index (SVI) of 42% sits in the low 3rd percentile of readings from the past year, meaning options players are pricing in low volatility expectations.

Lastly, SHAK could benefit from a short squeeze. The 3.85 million shares sold short make up a 10.4% of the stock's available float, or over four days' worth of pent-up buying power.

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