Fuel cell manufacturer Bloom Energy Corp (NYSE:BE) is getting its teeth kicked in on the charts, along with the rest of the broader market. BE is down 7.1% to trade at $20.11 today, and is now nursing a 20% deficit for the month of September. If there's any consolation, this month's pullback has bullish implications for the stock, if past is precedent.
In the past three years, there were three other occasions where BE was within one standard deviation of its 160-day moving average after an extended stint above it, per Schaeffer's Senior Quantitative Analyst Rocky White. One month after testing this trendline, the shares were higher two-thirds of the time and sported an average return of 25.3%. From its current perch of $20, a move of similar magnitude would put the equity around $25, filling in its September bear gap.
BE is a sleeping giant of sorts, from a contrarian perspective. A healthy 10.8% of the stock's total available float is sold short. At the shares' average of pace of trading, it would take shorts almost six trading days to buy back their bearish bets.
Options are flashing as an intriguing route for an investor. The security's Schaeffer's Volatility Index (SVI) of 76% stands higher than just 24% of readings from the past 12 months, suggesting that these players are pricing in low volatility expectations right now. What's more, the stock's Schaeffer's Volatility Scorecard (SVS) stands at 99 out of 100. This means BE has tended to outperform these volatility estimates.