UNFI has pulled back to the historically bullish 40-day moving average
Organic food stock United Natural Foods Inc (NYSE:UNFI) has been steadily falling on the charts since its Sept. 30 nearly four-year high of $52.35. However, the stock looks poised for a short-term bounce, as UNFI's Relative Strength Index (RSI) of just 8.5 sits deeply in "oversold" territory.
Plus, the equity just came into contact with its 40-day moving average, after spending a significant period of time above it. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, six similar signals have occurred in the past three years. United Natural Foods stock enjoyed a positive return one-month return in 67% of those cases, averaging a 20.6% gain. From its current perch, a similar move would send UNFI back up toward its recent highs.
A shift in sentiment in the options pits could provide tailwinds as well. Of the seven analysts in coverage, six carry a "hold" or worse rating on United Natural Foods stock, with just one "strong buy."
Plus, now looks like a good time to weigh in on UNFI's next move with options. The stock's Schaeffer's Volatility Index (SVI) of 44% stands higher than just 2% of all other readings in its annual range, implying that options players are pricing in low volatility expectations at the moment.