The shares of Bunge (BG) are staging a bounce off the $107 level, which contained the stock’s pullback from its April 21, roughly 14-year high of $128.40. What’s more, this area coincides with a historically bullish trendline that could serve as a springboard for BG, and help the stock add to its 23% year-over-year lead. In other words, now looks like a solid opportunity to bet on the equity’s next move higher.
The trendline in question is Bunge stock’s 80-day moving average. According to a study from Schaeffer’s Senior Quantitative Analyst Rocky White, the security has come within striking distance of this trendline four times over the past three years, seeing a positive one-month return after 75% of these signals, while averaging a 10% gain . From its current perch of $111.13, a similar move would place BG above the $122 level for the first time since April.
The options pits are already bullish towards Bunge stock. This is per BG’s 10-day call/put volume ratio of 11.55 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 70% of readings from the past 12 months. This suggests calls have been getting picked up at a much quicker-than-usual clip.
It’s also worth noting BG ranks high on the Schaeffer’s Volatility Scorecard (SVS), with a score of 92 out of 100, meaning the security has consistently realized bigger returns than its options implied volatility (IV) levels have priced in.
Credit: www.forbes.com /