Analyst Upgrades DoorDash Stock on Covid-19 Tailwinds

Short interest has plummeted over the last two reporting periods

Assistant Editor
Dec 1, 2021 at 10:40 AM
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DoorDash Inc (NYSE:DASH) could benefit from the omicron variant, according to Gordon Haskett. The firm upgraded the security to "buy" from "hold," saying the food delivery concern could see a rebound in orders if Covid-19 infections rise due to the potentially vaccine-resistant strain. DASH is still struggling for direction this morning, though, last seen up 0.3% to trade at $179.24.

The last time we check in on Doordash stock, it was receiving some bullish attention after a major acquisition. Not much has changed on the analyst front since then, with eight of the 17 firms in question calling DASH a "buy" or better, while the remaining nine say "hold." Shorts, meanwhile, are hitting the exits at an alarming rate, with short interest down 27.8% in the last two reporting periods.

Options traders are incredibly bullish towards the equity. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), DoorDash stock sports a 10-day call/put volume ratio of 2.72, which is higher than 95% of readings from the past year. In other words, calls are getting picked up at a quicker clip than what is typically observed.

Now could be a good time to weigh in on the stock's next move with options, as DASH sports attractively priced premiums at the moment. This is per its Schaeffer's Volatility Index (SVI) of 63%, which sits in the 21st percentile of its annual range.

Today's price action should help the security make up at least some lost ground, given it shed just over 9% in a month. However, the 120-day moving average, which caught a pullback in early November, moved in as resistance a little over a week ago. Longer term, DASH is up 26% year-to-date.

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