The 126-day moving average has historically produced positive returns for HLT
Hilton Hotels Corporation (NYSE:HLT) stock is pulling back alongside the broader market, last seen down 3.3% to trade at $238.95, and on track for its sixth consecutive daily loss. Shares still boast a 16.1% year-over-year lead, however, and just notched a Feb. 13, record high of $275.22. Even better, this recent drawdown placed HLT near a trendline with historically bullish implications.
Per Schaeffer's Senior Quantitative Analyst Rocky White, Hilton Hotels stock is now within striking distance of its 126-day moving average (representing half a years worth of trading), a move that has typically resulted in positive returns. This follows a prolonged period above this trendline (defined by White as 80% of the time in the past two months and eight of the last 10 trading days). A similar move occurred six times over the last three years, after which HLT was higher one month later each time, averaging a 5.5% gain.
At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), HLT'S 50-day call/put volume ratio ratio of 10.16 ranks higher than 80% of annuals readings. This indicates options traders have been much more bullish than usual in the last 10 weeks.
The brokerage bunch, on the other hand, still leans bearish. Of the 23 firms in coverage, 14 still call Hilton Hotels stock a "hold," suggesting there is plenty of room for upgrades that could provide tailwinds.