Sony stock is flashing a historically bullish signal
Sony Group Corp (NYSE:SONY) has been cooling from its Nov. 8 record high of $124.63, down 0.5% at $121.85 at last check. The security tore up the charts the past few weeks, after bouncing off the $104 level. A new floor seems to have formed at the $121 area, too, which is helping the shares sustain their 42.5% year-over-year lead. The even better news is that the equity could soon topple this all-time high, given it is now flashing a historically bullish signal that has preceded notable rallies.
Specifically, Sony stock's latest peak comes amid low implied volatility (IV), which has been a bullish combination for the equity in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there were five 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) sat in the 20th percentile of its annual range or lower. This is now the case with SONY's SVI of 24%, which ranks in the 7th percentile of its 12-month range.
White's data shows that one month after these signals, the equity was higher 60% of the time, averaging a 2.7% return for that period. From its current perch, a comparable move would put SONY at a brand new record high of $125.57.
Analysts are already firmly bullish towards Sony stock, with all five in question calling it a "strong buy." Plus, the security's 12-month consensus target price of $154.95 is a 26.6% premium to current levels.
It is also worth noting the security has exceeded options traders' volatility expectations in the past year, per SONY's Schaeffer's Volatility Scorecard (SVS), which sits at 96 out of a possible 100.