Bilibili shares have just pulled back to the 50-day moving average, which could provide additional tailwinds
Chinese video concern Bilibili Inc (NASDAQ: BILI) recently pulled back to its 50-day moving average, but for context purposes still remains within vicinity of its May highs. Although the stock has more than doubled in 2020, there's reason to believe this support could provide more tailwinds in the next three months.
Despite BILI's 115% year-to-date gain, the door is wide open for bull notes to boost the security. While all six of those in coverage dole out "strong buy" ratings, the consensus 12-month price target of $43.23 is a slim 3% premium to its current perch.
Since April, the shares have tacked on 60%. At the same time, short sellers have built their positions by 61%, with the 23.90 million shares sold short accounting for a healthy 10% of BILI's total available float. At the stock's average pace of trading, it would take almost four days for bears to buy back their bets; an ample amount of buying power that could hit the market.
In the options pits, there is a large amount of put open interest located at the 40-strike in the August and September series. And in addition to that options-related support, the security’s Schaeffer's Volatility Index (SVI) of 60% stands higher than 25% of all other readings from the past year – which implies near-term option traders are pricing in relatively low volatility expectations.
Subscribers to Schaeffer's Weekend Trader options recommendation service received this BILI commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.