Energy Stock Pullback Could Yield Big Returns

IREN is trading near the bullish 50-day moving average

Jul 26, 2024 at 12:12 PM

IREN

Subscribers to Schaeffer's Weekend Trader options recommendation service received this IREN 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.

Iris Energy Ltd (NASDAQ:IREN) stock just pulled back to its historically bullish 50-day moving average, which over the past three years produced returns of 23.2% for the shares a month later in 67% of circumstances. This trendline also coincides with the 50% year-over-year return level, triple this year’s low of $10.95, as well as the 38.2% Fibonacci retracement of the stock’s initial public offering (IPO) highs and lows.

Short interest is rolling over from all-time highs, down 23.2% in the most recent reporting period. Implied volatility (IV) is also reasonable at 120%, given it accounts for mid-September earnings and the 63-day historical volatility (HV) of 112%.

Our recommended September call doubles at a level prior to the average 12-month target of $17 and on a 41.4% rise in the underlying security.

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