Prescription stock Hims & Hers Health (HIMS) has experienced a 2.8% drop in its stock price, currently trading at $22.45 and last week saw a 10.6% decline. However, the pullback has brought HIMS close to a historically bullish trendline, indicating a potential upward movement if past trends are anything to go by. The stock is within one standard deviation of its 50-day moving average, with the equity trading above the moving average 80% of the time over the past two months and closing above the trendline in eight out of the last 10 sessions.
Schaeffer’s Senior Quantitative Analyst Rocky White notes that the equity has encountered this trendline five times in the last three years and was higher one month later 60% of the time, with an average return of 12%. A move of similar magnitude from its current level could see HIMS surpass $25 for the first time ever. With the stock already up by 152% in 2021, there is room for more optimism as half of the brokerages covering the stock maintain “hold” ratings, leaving potential for upgrades in the future. Additionally, 9% of the stock’s total available float is sold short, indicating some short interest despite a 17% decline in the most recent reporting period.
In the options market, sentiment around HIMS could shift positively as the stock’s Schaeffer’s put/call open interest ratio (SOIR) is higher than 90% of annual readings, suggesting a put-bias among premium traders. Furthermore, HIMS has a history of making larger moves than what the options market has priced in over the past 12 months, as indicated by its Schaeffer’s Volatility Scorecard (SVS) rating of 85 out of 100. This high volatility score implies that the stock may continue to see significant price movements in the future, creating opportunities for traders.
Overall, despite recent declines in its stock price, HIMS is showing signs of potential upside as it nears a historically bullish trendline and with room for upgrades from brokerages in the future. Short interest in the stock remains relatively high, indicating a level of skepticism among traders. However, a shift in sentiment in the options market, combined with HIMS’ history of larger than expected price movements, suggests that the stock may see further gains in the coming weeks. Investors should keep an eye on key levels and upcoming news developments to navigate potential trading opportunities in HIMS.
