Several Layers of Support in Place for Allstate Stock

ALL is now back above all major daily, weekly, and monthly averages, as well as its 2020 highs

Sep 20, 2022 at 12:49 PM

Insurance concern Allstate Corp (NYSE:ALL) recently reported catastrophic numbers that came in below its threshold level for August, while increasing rates in 72 locations by more than 10%. What’s more, the shares broke out of downtrend only to pull right back into it, faking out buyers as it bounced. However, the equity is now back above all major daily, weekly, and monthly averages, as well as its 2020 highs, and have pushed back above double its 2020 lows at $128.26.

It’s also worth noting that the price action that is currently playing out for Allstate stock is similar to its second major bottom at the 2020, Covid-19 low anchored volume-weighted average price (AVWAP), when prices rallied extensively off that level. This means shares could be poised for another big rally after a period of consolidation. With the security also now back above its daily and weekly volume points of control (VPOC), we are recommending a new long position on ALL.

ALL wt repost

There’s plenty of room for analysts to shift into a more bullish stance, given 11 of the 21 firms in coverage still carry a tepid "hold" or worse rating. Plus, a break above the October 130-strike level could produce a squeeze scenario, with large call open interest (OI) currently concentrated.

Plus, Allstate stock has frequently exceeded option traders' volatility expectations over the past year. This is per the equity’s Schaeffer's Volatility Scorecard (SVS), which ranks at an elevated 81 out of 100. Our recommended call option has a leverage ratio of 6.7, and will double in value on a 15.2% rise in the underlying equity.

Subscribers to Schaeffer's Weekend Trader options recommendation service received this ALL 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.

Follow @Schaeffers

Are You Ready for AI's Potential Supercycle Phase?
Amazon's Jeff Bezos surprised investors when he revealed that one emerging technology is the key to Amazon's future success... This technology could be worth $80 trillion by 2030. Learn more and join Motley Fool's Stock Advisor for 50% off!

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.