Weyerhaeuser stock just pulled back to a historically bullish trendline
The shares of Weyerhaeuser Co (NYSE:WY) -- a real estate investment trust (REIT) that specializes in timber -- have mostly recovered from their pullback from their Feb. 9 record high of $41.55. Though the security is down 4.6% in 2022, due to a break back below the formerly supportive 80-day moving average, it still boasts an 18% year-over-year lead. Even better, another trendline sits just below that's been supportive to WY in the past.
According to data from Schaeffer's Senior Quantitative Analyst Rocky White, WY just came within one standard deviation of its 160-day moving average after a lengthy period above this trendline. WY has experienced four similar pullbacks in the past three years, logging a positive one-month return in 67% of those instances, while averaging a 1.8% pop. While this return is muted, a similar move from its current perch could help WY reclaim its 80-day moving average.
Short sellers have already been hitting the exits, with short interest down 12.2% over the last reporting period. The 9.62 million shares sold short now make up a slim 1.3% of the stock's available float.
Meanwhile, short-term options traders seem to have taken a call-heavy stance. This is per WY's Schaeffer's put/call open interest ratio (SOIR) of 0.25, which sits higher than just 4% of readings from the past 12 months.
Now might be time to join these bulls, as options traders are pricing in relatively low volatility expectations for WY at the moment. More specifically, the equity's Schaeffer's Volatility Index (SVI) of 0.27 sits in the relatively low 31st percentile of its annual range.