Online retailer Wayfair (W) is flying high today, after the company reported a 58% year-over-year increase in direct retail sales during the five-day span between Thanksgiving and Cyber Monday. As such, W stock is up 15.4% to trade around $105.74, and it’s set for its best week since May. What’s more, Wayfair shares recently flashed a buy signal on the charts, suggesting even more upside could be in store.
Since touching a record high of $151.19 in mid-September, W pulled back with the broader equities market, finding support at a trendline connecting higher lows since early 2017. As such, the stock recently came within one standard deviation of its 80-week moving average, after a lengthy stretch above this trendline. There have been three previous signals of this kind, after which Wayfair shares went on to average a three-month gain of 29.3%, per data from Schaeffer’s Senior Quantitative Analyst Rocky White.
In light of Wayfair’s fundamental and technical muscle this week, a short squeeze could add fuel to the equity’s fire. Short interest accounts for nearly 19% of the stock’s total available float, representing about a week’s worth of pent-up buying demand, at the W’s average pace of trading.
In the same vein, the majority of analysts following Wayfair maintain “hold” or “strong sell” opinions. Should the stock extend this week’s rebound, a wave of upbeat analyst attention could lure more buyers to the table.
Traders looking to speculate on W stock with options have history on their side, too. The security’s Schaeffer’s Volatility Scorecard (SVS) sits at a lofty 94 out of 100, indicating W has handily exceeded options traders’ volatility expectations in the past year.