Now also seems to be an affordable time to purchase EW options
Artificial heart valve maker Edwards Lifesciences Corp (NYSE:EW) has been asurging up the charts following its late-October test of the century level. And according to Schaeffer's Senior Quantitative Analyst Rocky White, more upside may be in the cards for the medical technology name, as it has been one of the best stocks to own in the third quarter, looking back over the last 10 years.
Per White, the equity has averaged a gain of 13.8% in the third quarter during the last decade, with 90% of those returns positive -- second only to Vertex Pharmaceuticals (VRTX) in terms of largest average percentage gain. Based on its current perch, another move of this magnitude would put the shares near $166 -- a fresh record high for the stock.
At last check, EW is trading 0.3% lower at $145.75. Since hitting an all-time peak of $155.22 on June 20, the stock has pulled back to its 30-day moving average, which served as a floor in May. Longer term, Edwards Lifesciences stock has picked up 29% year-to-date.
Options traders have certainly been betting on more upside. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), EW's 50-day call/put volume ratio of 2.19 ranksin the 96th percentile of its annual range, meaning calls have been bought to open over puts at a quicker-than-usual clip.
Lastly, now seems to be a great time to target short-term options on the stock. Its Schaeffer's Volatility Index (SVI) of 23% ranks in the 22nd percentile of its annual range, meaning low volatility expectations are being priced into near-term contracts.