NWL's 40-day moving average has helped push the security higher three times in the past few years
The shares of Newell Brands Inc (NASDAQ: NWL) are down 0.7% at $16.84 this afternoon, though the equity is still enjoying a 32.9% three-month lead. And while the stock is now testing support at its 20-day moving average, a historically bullish trendline a little lower on the charts could help the security topple this ceiling in coming weeks.
Specifically, Newell Brands stock just came within one standard deviation of its 40-day moving average, after spending several weeks above the trendline. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, three similar signals have occurred during the past three years. NWL enjoyed positive returns one month after each signal, averaging a 8.5% gain. A similar move from its current perch would put the equity just above the $18 level, which marks territory that has not been reached since early February.
Analysts were skeptical of the security coming into today, with six of the eight in question carrying a tepid "hold," compared to just two sporting a "strong buy" ratings. In simpler terms, there remains plenty of room for upgrades on NWL in the coming weeks.
This pessimism is not echoed in the options pits, where calls are preferred. The security sports a 50-day call/put volume ratio of 8.76 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than all annual readings, suggesting a healthier-than-usual appetite for long calls of late.