The 260-day moving average has served as a springboard for HPE in the past
It's been a volatile year for Hewlett Packard Enterprise Co (NYSE:HPE) stock, which surged to a Feb. 10, roughly four-year high of $17.76, before pulling back to the $15 level earlier this month. HPE has added 8.7% over the past six months, though, and its latest dip has placed it near a historically bullish trendline that has preceded rallies in the past. In other words, now looks like an opportune time to bet on a move higher for the stock.
According to Schaeffer's Senior Quantitative Analyst Rocky White's latest study, HPE is within one standard deviation of its 260-day moving average. The tech concern has seen five similar signals over the past three years, and was higher one month later 80% of the time, averaging a 3.2% return during that period. A comparable move would place the stock just shy of $17.
An unwinding of pessimism over in the options pits could push HPE higher, too. This is per the stock's 10-day put/call volume ratio of 1.38 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than all but 1% of readings from the past 12 months. This suggests there has been a healthier-than-usual appetite for puts lately.