TMUS shares are trading near a historically bullish moving average
Shares of
T-Mobile US Inc (NASDAQ:TMUS) have carving out a stream of higher highs over the last 12 months -- up more than 52%. TMUS stock's uptrend has been underscored by its rising 80-day moving average. If past is precedent, a recent pullback to this historically bullish trendline could suggest T-Mobile stock could take aim at its May 2 record high of $68.88.
According to data from Schaeffer's Senior Quantitative Analyst Rocky White, TMUS stock has averaged a 21-day gain of 5.7% over the last eight times it's come within one standard deviation of its 80-day moving average, and has been positive 86% of the time. A move of this magnitude would send TMUS stock near $69, based on its current perch at $65.21.
TMUS Options Activity Shows Signs of Skepticism
T-Mobile shares could also see tailwinds, should skeptics start capitulating to its upward momentum. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day put/call volume ratio of 0.76 ranks in the 72nd annual percentile, meaning puts have been bought to open over calls at a faster-than-usual clip.
Drilling down, the June 62.50 put is home to T-Mobile's top open interest position, with nearly 26,500 contracts in residence. This could help contain any near-term pullbacks in TMUS stock -- perhaps in the wake of Tuesday's annual shareholders meeting -- as the hedges related to these bets unwind ahead of next Friday's options expiration.
TMUS Stock Ripe for a Short Squeeze
There's plenty of room for short sellers to throw in the towel on their losing positions. Short interest on TMUS rose 4.1% in the most recent reporting period, and now accounts for a healthy 7.9% of the stock's available float. At the equity's average pace of trading, it would take more than a week to cover these bearish bets -- meaning there's ample cash available to add fuel to T-Mobile's fire.
And while the majority of brokerages maintain a "buy" or better rating on
TMUS stock, upbeat analysts are still weighing in on the shares. Just yesterday, Drexel Hamilton initiated coverage on T-Mobile with a "buy" rating and $80 price target, saying the company is "shaking up" the industry.
TMUS Options are Affordable Right Now
Now's an affordable time to bet on TMUS stock's short-term trajectory with options, considering its Schaeffer's Volatility Index (SVI) of 26% ranks in the 17th annual percentile. In other words, low volatility expectations are being priced into short-term T-Mobile options, a potential boon to premium buyers.