INFO has added almost 54% in 2019
Information and analysis services stock IHS Markit Ltd (NYSE:INFO) has been an outperformer on the charts. Long-term support from the 50-day moving average has the shares up 53.7% year-to-date, and fresh of their 11th straight monthly gain. With this steady support in place, now is a prime time to buy calls.
Digging deeper, short interest has surged 111% from its May bottom. At the equity’s average pace of daily trading, it would take short sellers just over four days to buy back their bearish bets, signaling that ample sideline cash is available to help keep the wind at the equity's back. Plus, six covering firms still sport a tepid "hold" or worse rating, meaning there remains plenty of room for upgrades on the stock.
Lastly, short-term options premiums on IHS Markit look relatively cheap at the moment, based on the equity's Schaeffer’s Volatility Index (SVI) of 19%, which ranks in the 13th percentile of its annual range. Our recommended call option has a leverage ratio of 8.1, and will double in value on an 11.8% rise in the underlying security.
Subscribers to Schaeffer's Weekend Trader options recommendation service received this INFO commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.