Pinterest Inc (NYSE:PINS) is down 0.4% at $24.61 at last check, likely weighed down by the hotter-than-expected consumer price index (CPI) reading for January. The stock has pulled back from its Feb. 2, one-year high of $29.16, but has found a new floor at the $24 region. The good news is that this latest pullback has PINS trading near a trendline with historically bullish implications.
The trendline in question is PINS’ 80-day moving average, which the stock is within one standard deviation from, at last check. Per Schaeffer’s Senior Quantitative Analyst Rocky White’s latest study, the equity saw two similar signals over the last three years, and was higher one month later each time, averaging a 12.5% gain. A comparable move would have the security filling its 7.8% bear gap in the last 30 days.
Short interest on Pinterest stock is up 8.8% over the last two reporting periods, and the 32.40 million shares sold short now make up 5.5% of PINS’ available float. Should this pessimism start to unwind, shares could receive even more tailwinds.
At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity’s 50-day put/call volume ratio sits higher than 86% of annual readings, suggesting puts have been getting picked up at a faster-than-usual clip. In simpler terms, Pinterest stock could also benefit from a sentiment shift among options traders.
It’s also worth noting that options are attractively priced right now. This is per the stock’s Schaeffer’s Volatility Index (SVI) of 53% that ranks in the extremely low 5th percentile of its annual range. It’s also worth pointing out that the equity ranks low on the Schaeffer’s Volatility Scorecard (SVS), with a score of 0 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.