Dow stock could remain steady, if history is any indicator
As markets experience even more volatility, with the major indexes swinging wildly in both directions today, Dow Inc (NYSE:DOW) is remaining steady as one of the best blue-chip performers this afternoon. The stock was last seen up 2.6% at $67.50, adding to an impressive 18.9% year-to-date lead. Plus, if history is any indicator, the shares could bounce even higher in the coming month.
This is because DOW just landed on a study from Schaeffer's Senior Quantitative Analyst Rocky White after pulling back to its 40-day moving average. Per White's study, the equity has seen seven similar pullbacks over the past three years. One month after 86% of these instances, the stock was higher, averaging a 2.1% return. While this is relatively muted, it could mean some additional stability for the blue-chip stock amid an increasingly tumultuous market environment.
A round of upgrades could give DOW a boost as well. Of the 13 analysts in coverage, nine say "hold" or worse, compared to four "buy" or better ratings. Meanwhile, the 12-month consensus price target of $4.05 is a slim 9.5% premium to current levels.
A shift in the options pits could also put wind at the stock's back. While calls are still outnumbering puts on an overall basis, the stock's 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits higher than 82% of readings from the past year. In other words, there's been a healthier-than-usual appetite for long puts of late.