The latest nor’easter has grounded more than 3,900 flights so far, and is expected to dump up to a foot of snow on New York City. In fact, this month alone, more than 10,000 flights have been canceled due to back-to-back nor’easters — marking the worst March for cancellations in at least five years, per FlightAware. However, one retail stock could warm up your portfolio soon, if history is any indicator: winter clothing maker Canada Goose Holdings (GOOS).
GOOS shares recently pulled back to their 80-day moving average after a lengthy stretch above this trendline, which has been a “buy” signal in the past. According to Schaeffer’s Senior Quantitative Analyst Rocky White, a month after the last two dips to this trendline, Canada Goose stock was higher both times, averaging a massive gain of 20.55%.
At last check, GOOS stock was up 1.7% to trade at $36.36. The security is now within a stone’s throw of its Feb. 7 all-time high of $38.25. If past is prologue, a similar rally off the 80-day over the next few weeks would put the shares in uncharted territory in no time.
A short squeeze could also help the equity extend its run higher. Short interest grew nearly 38% during the past two reporting periods, and now represents nearly 8% of the stock’s total available float. At GOOS’ average daily trading volume, it would take about a week to buy back these bearish bets.
What’s more, options traders hoping to speculate on GOOS stock’s near-term trajectory can do so at a relative discount. The shares sport a Schaeffer’s Volatility Index (SVI) of 38% — higher than just 1% of all other readings from the past year. This indicates that options are pricing in rock-bottom volatility expectations for GOOS in the near term.
The equity’s April 36 call is currently asked at $1.80. Buyers of the call would profit if GOOS stock rallies above $37.80 (strike plus premium paid) by options expiration on Friday, April 20. From current levels, that’s just a 4% bump for the shares.