TASER International, Inc. (TASR) is trading near its 320-day moving average and lower Bollinger Band
Since hitting its most recent high near $27.60 in mid-February,
TASER International, Inc. (NASDAQ:TASR) has shed 18.3% to trade at $22.51. Amid this retreat, shares of TASR have pulled back to two significant technical levels, suggesting now may be the time to
buy the dip on the stun gun maker. With TASR's short-term options priced at affordable levels, too, speculative players could take advantage of long calls to bet on a near-term bounce.
Diving right in, TASR shares are currently trading near their 320-day moving average. According to Schaeffer's Senior Quantitative Analyst Rocky White, in the seven other times this signal has occurred in the last three years, the stock has gone on to average a 21-day return of 5.9%, and has been positive 71% of the time. Plus, TASR recently breached its lower Bollinger Band, suggesting the equity is oversold and could be due for a rebound. Echoing this, TASR's 14-day Relative Strength Index (RSI) is docked at a low 26.
Options traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have seemingly been betting on a reversal of fortune for shares of TASR. Specifically, the stock's 10-day call/put volume ratio of 7.33 ranks in the 74th annual percentile, meaning calls have been bought to open over puts.
Among near-term strikes, TASR's March 25 call has seen the largest rise in open interest over this time frame, and data from the major exchanges confirms the bulk of the activity has been of the buy-to-open kind. While some of the action may be at the hands of "vanilla" bulls, it's possible short sellers have bought to open the out-of-the-money calls to hedge against a potential bounce. Short interest accounts for a lofty 21% of TASR's available float, or 14.4 times the stock's average pace of trading.
Regardless of the reason, now appears to be an opportune time to purchase premium on the stock's near-term options. Not only does TASR's Schaeffer's Volatility Index (SVI) of 32% rank in the 14th annual percentile, but its 30-day at-the-money implied volatility of 32.1% is perched below 95% of all comparable readings taken in the past year. Summing it all up, low volatility expectations are currently being priced into TASER International, Inc.'s (NASDAQ:TASR) short-term options.
Don't miss Schaeffer's free weekly stock market forecast. Sign up now for Monday Morning Outlook.