Dell Technologies (DELL) may be up a healthy 55% in 2024, but the computer hardware stock has stumbled in December, down 7% month to date. If past is precedent though, shares could be moving back up the charts by the end of the year.
The bullish trendline in question is DELL’s 260-day moving average, which represents a 52-week or approximately a 1-year trend analysis. Per Schaeffer’s Senior Quantitative Analyst Rocky White, the equity ran into this trendline twice in the last three years.
For the purpose of this study, White defines that as the equity trading above the moving average 80% of the time over the past two months and closing north of the trendline in eight of the last 10 sessions before coming within striking distance of it. DELL finished higher one month later both times, averaging a gain of 13.9% gain. From its current perch at $118.66, a move of similar magnitude would have the security mostly filling its 14.3% gap suffered in the last 30 days.
Fueling the rebound case is the shares’ 14-day relative strength index (RSI) of 25, on the cusp of “oversold” territory. Options traders lean bearish as well, per the security’s 50-day put/call volume ratio on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OM X PHLX (PHLX) that ranks in the 96th percentile of its annual range.
Echoing this, Dell stock’s Schaeffer’s put/call open interest ratio (SOIR) of sits in elevated 70th percentile of reading from the past 12 months. An unwinding of this bearish skew could fuel additional tailwinds for DELL.
It’s also worth noting that the stock’s elevated Schaeffer’s Volatility Scorecard (SVS) of 85 out of 100 implies a tendency to outperform volatility expectations — a boon for premium players.