Bull Signal Says SPG Has More Room To Run

The shares of real estate concern Simon Property Group (SPG) have enjoyed a sunny year thus far, adding 53.9% in 2021 to hit a June 8, roughly two-year high of $136.70. In addition, the security has locked in five weekly wins out of the last six. Even better, shares have just recently pulled back to a trendline with historically bullish implications, which could send SPG even higher on the charts.

More specifically, Simon Property Group stock just came within one standard deviation of its 40-day moving average, after spending some time above this trendline. According to data from Schaeffer’s Senior Quantitative Analyst Rocky White, six similar signals have occurred in the past three years. The equity enjoyed a positive return one month later, averaging a 10.5% gain for that time period. From its current perch, a comparable move would put SPG above the $145.50 mark for the first time since January 2020.

A shift in sentiment among the brokerage bunch could propel the security higher as well. Of the 14 analysts in coverage, just five rate SPG a “buy” or better, while nine say “hold.” An unwinding of short interest could provide additional help, as the 13.68 million shares sold short would take over a week to cover, at the equity’s average pace of daily trading.

There is also room for increased optimism over in the options pits, which lean bearish. This is per Simon Property Group stock’s 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than all but 3% of readings from the past 12 months. This suggests a healthier-than-usual appetite for long puts of late.

Now looks like a good opportunity to weigh in on the security’s next move with options, too. The security’s Schaeffer’s Volatility Index (SVI) of 27% sits in the extremely low 1st percentile of its annual range, meaning options players are currently pricing in low volatility expectations.

Read More