Shares are running into their historically bullish 40-day moving average
Spotify Technology SA (NYSE:SPOT) is up 1.8% to trade at $160.22 this afternoon, as the broader market waxes and wanes while investors ponder a
potential interest rate hike. The security is up 103.2% in 2023, and it looks like SPOT could continue to climb the charts, as the equity has come within striking distance of a historically bullish trendline.
Digging deeper, the security is running into its 40-day moving average. Per Schaeffer's Senior Quantitative Analyst Rocky White's last study, SPOT saw four similar signals in the past three years. One month later the stock was higher 75% of the time, averaging a 6.2% pop. A move of similar magnitude would place SPOT at around $170, or its highest level since February 2022.
While the majority of analysts are bullish, there's still room for bears to change their tune. Of the 24 firms in coverage, eight still rate Spotify stock a tepid "hold." Meanwhile, the12-month consensus target price of $159.67 is a slim 0.8% discount to the equity's current perch.
Short-term options traders have been overwhelmingly pessimistic on SPOT, too. This is per its Schaeffer's put/call open interest ratio (SOIR) 1.27, which ranks higher than 76% of readings from the past year. An unwinding of these bearish bets could help the shares on the charts.
Now might be a good time to speculate on the stock's next move with options, according to its Schaeffer's Volatility Index (SVI). Spotify stock's SVI of 31% sits in the low 3rd percentile of its 12-month range. In other words, options traders are pricing in low volatility expectations right now.