Schaeffer's Top Stock Picks for '25

Bearish Trendline Stifling Wayfair Stock's Latest Rally

The shares could soon dip back below $34

Digital Content Manager
Apr 13, 2023 at 3:23 PM
facebook X logo linkedin


Wayfair Inc (NYSE:W) stock is up 3.3% to trade at $35.18 at last check, bouncing off a floor at the $30 region. A historically bearish trendline that has been in place since a late February bear gap recently turned down the equity's latest rally, though, and may further pressure it into its already steep 69.7% year-over-year deficit.

The trendline in question is Wayfair stock's 40-day moving average. Per Schaeffer's Senior Quantitative Analyst Rocky White's latest study, W saw six similar signals during the last three years, and was higher one month later 83% of the time to average a 4.9% decline. A comparable move from its current perch would place shares back below $34.

W 40 Day

Short sellers are firmly in control, despite short interest dipping 4.8% in the most recent reporting period. The 24.14 million shares sold short now make up 31.6% of the stock's available float.

The options pits also lean bearish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Wayfair stock's 50-day put/call volume ratio of 1.75 sits higher than 86% of readings from the last 12 months.

Premiums are reasonably priced right now, per W's Schaeffer's Volatility Index (SVI) of 86% that sits in the 6th percentile of its annual range. This means options traders are pricing in low volatility expectations at the moment -- a boon for options buyers. 

 
 

You have the chance to join one of Bernie's most exclusive programs, complete access at HUGE savings!

As we prepare for a new administration to take the reins in Washington, the near-term market landscape is rife with uncertainty.

The Federal Reserve has already hinted at the turbulence ahead, lowering its interest rate outlook for 2025.

Meanwhile, breakthroughs in artificial intelligence (AI), quantum computing, and other transformative sectors have unlocked incredible profit potential.

But these opportunities are fleeting, and timing is everything. That's where Quick-Hit Trader comes in.

Quick-Hit Trader is designed for precision and speed, getting you in and out of the market in a flash. While other investors scramble to navigate volatile conditions, you'll have access to expertly curated trades that leverage these rapid shifts to deliver explosive profits in short order.

This is your chance to capitalize on the fast-moving market like never before. Are you ready to make your move?

 

 

(function(doc, script) { var js, fjs = doc.getElementsByTagName(script)[0], frag = doc.createDocumentFragment(), add = function(url, id) { if (doc.getElementById(id)) {return;} js = doc.createElement(script); js.src = url; id && (js.id = id); frag.appendChild( js ); }; // Google+ button //add('https://apis.google.com/js/platform.js', async="defer"); // Facebook SDK add('//connect.facebook.net/en_US/all.js#xfbml=1&appId=772755279557744', 'facebook-jssdk'); // Twitter SDK //add('//platform.twitter.com/widgets.js', charset='utf-8'); fjs.parentNode.insertBefore(frag, fjs); }(document, 'script'));