Retailer Skechers USA (SKX) has taken an 8.2% haircut this quarter, which has resulted in the stock breaching its year-to-date breakeven level. Now trading at $61.59, the shares are a ways off their June 12 record highs of $75.09. The upside is this has SKX encountering a historically bullish trendline.
According to Schaeffer’s Senior Quantitative Analyst Rocky White, SKX is within one standard deviation of its 320-day moving average. Over the past three years, the shares have seen four similar signals, and were positive one month later 100% of those times to average a 11.1% gain. A move of comparable magnitude would put the equity back into the black for the quarter and above its 2024 breakeven point.
Short interest has is building on SKX, up 11.3% during the latest reporting period. These bearish bets now account for 43% of the stock’s total available float, and it would take short sellers nearly three days to buy back their bearish bets, at the average daily pace of trading.
Those wanting to bet on a repeat of history may want to consider a premium-buying strategy. Options are affordably priced, per the securiyt’s Schaeffer’s Volatility Scorecard (SVS) tally of 80 out of 100, which implies it’s tended to exceed options traders’ volatility expectations in the past year.