Tenet Healthcare Stock Has More Room to Run

Tenet Healthcare Corp (NYSE:THC) stock is up 0.7% to trade at $73.13 this afternoon. The security is now just shy of its Aug. 2 17-year high of $74.32, while boasting a 174.4% year-over-year lead, after bouncing off its 100-day moving average. The shares could soon nab even more highs, too, as THC is currently flashing a signal with historically bullish implications.

More specifically, Tenet Healthcare stock's latest peak comes amid historically low implied volatility (IV), which has been a bullish combination for the security in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been three other times over the past five years when the stock was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) was in the 20th percentile of its annual range or lower. This is now the case with RTX's SVI of 35%, which stands in the 2nd percentile of its 12-month range.

White's data shows that the equity was higher one month after these signals, averaging a 14.5% return. From its current perch, a similar move would place THC just shy of the $84 mark.

A shift in the options pits could keep the wind at the equity's back. This is per THC's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 82% of readings in its annual range. This means puts are being picked up at a quicker-than-usual rate.

Echoing this, the security's Schaeffer's put/call open interest ratio of 1.16 (SOIR) sits higher than 78% of readings from the last year, suggesting traders have rarely been more put biased.