Bull Signal Flashing for Outperforming Retail Stock

DKS is flashing a historically bullish signal on the charts

Dick’s Sporting Goods Inc (NYSE:DKS) stock is enjoying a small boost today, last seen 0.4% higher at $230.27. The shares remain near their June 20 record high of $234.47, and sport a nearly 57% year-to-date gain. The stock could continue higher as well, given its setup.

Dick’s Sporting Goods stock’s recent peak comes amid historically low implied volatility (IV), as its Schaeffer’s Volatility Index (SVI) of 27% ranks in the low 6th percentile of its annual range.

According to Schaeffer’s Senior Quantitative Analyst Rocky White, DKS saw seven signals over the past five years when it was trading within 2% of its 52-week high, while its Schaeffer’s Volatility Index (SVI) sat in the 20th percentile of its annual range or lower, as is currently the case. The stock was higher one month later after 86% of these signals, averaging an 8.22% gain. 

DKS Chart June 242024

An unwinding of pessimism could provide support as well. Of the 20 analysts in coverage, 10 carry a “hold” rating. What’s more, short interest still represents 9.5% of the stock’s available float, and would take more than four days to cover at DKS’ average pace of trading. 

A shift in options traders’ sentiment could also provide the equity with tailwinds. The security’s Schaeffer’s put/call open interest ratio (SOIR) of 5.84 stands higher than 99% of readings from the past 12 months, implying a put-bias amongst short-term options traders.

Furthermore, the security’s Schaeffer’s Volatility Scorecard (SVS) sits at an 90 out of 100, meaning DKS exceeded option traders’ volatility expectations during the past year.

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