Walgreens Boots Alliance Inc’s stock has been struggling since losing its spot on the Dow Jones Industrial Average this year. The equity has yet to recover from a record low of $8.08 in November and carries a significant 62.2% year-to-date deficit.
A recent study by Schaeffer’s Senior Quantitative Analyst Rocky White found that WBA crossed its 126-day moving average, which marks the sixth time this has occurred over the past three years. In those instances, the stock declined by an average of 6.3% in the following month.
The latest rally may have brought WBA back into a historically bearish trendline. According to White’s analysis, the stock is now within striking distance of its record low. A comparable move from its current price would put it near $8.08.
Additionally, an unwinding of optimism in options trading could exacerbate the stock’s woes. The 50-day call/put volume ratio stands at 3.32, indicating that long calls are more popular than usual. This is above 97% of annual readings, suggesting a potential shift away from the bullish sentiment that had driven WBA’s performance over the past year.
The Schaeffer’s Volatility Scorecard (SVS) score, which measures the company’s volatility expectations, stands at 95 out of 100. Despite this, WBA has consistently outperformed volatility expectations over the past year.
Source: https://finance.yahoo.com/news/why-walgreens-stocks-latest-rally-200925246.html