Xerox is purchasing Chinese-owned Lexmark
Xerox Holdings Corp (NASDAQ:XRX) agreed to acquire Chinese-owned printer and software name Lexmark International from Ninestar, PAG Asia Capital, and Shanghai Shoulda Investment Centre for $1.5 billion, with hopes to revive its mainstay business.
XRX was last seen 3% higher to trade at $8.64, on track for its best day since Nov. 21. In late October, Xerox stock experienced a post-earnings bear gap that placed it at $8.02 -- its lowest level on record. The 40-day moving average stymied an attempt to rally from that rut and has acted as pressure since November, but shares could topple it today. XRX remains down 52.5% in 2024, though.
There's room for negative sentiment to unwind in the options pits and help the security extend its bounce higher. This is per Xerox stock's Schaeffer's put/call open interest ratio (SOIR) of 3.06 that stands higher than 83% of readings from the past 12 months, which implies short-term premium traders are much more bearish than usual.
Adding to the case for a pending rally is XRX's relative strength index (RSI) reading for 25.7, which stands firmly in "oversold" territory. It's also worth noting that the stock has consistently outperformed volatility expectations in the last 12 months, as reflected in its Schaeffer’s Volatility Scorecard (SVS) score of 83 out of 100.