Kraft Heinz Company (NASDAQ:KHC) has had a rough time of the charts of late. Since suffering a brutal post-earnings bear gap in February the equity has attempted to find its footing atop the $32 region, but soon found itself south of the area -- dropping to a record low of $26.96 in late May. While the equity has managed to climb atop its 20-day moving average in recent months, its attempt at a rebound put it right in line with a technical signal that could send it spiraling.
Specifically, the stock just came within one standard deviation of its 80-day moving average after a lengthy period below the trendline. According to data from Senior Quantitative Analyst Rocky White, this signal has flashed eight times before with only 43% of returns positive, averaging a loss of 5.43%. From its current perch at $30.65, a similar move would knock KHC back below the $30 region -- which has served as a floor on the charts of late -- near $29.
Unsurprisingly, analysts are cautious on the Warren Buffett-backed stock, with 16 in coverage calling it a "hold." That doesn't mean downgrades are out of the question, however, with only two "strong sell" ratings on the table and a consensus 12-month target price of $34.30 that holds a 12% premium to current levels.
Likewise, there's plenty of room on the bearish bandwagon, with short interest down 9.5% in the last two reporting periods, representing a mere 2.3% of the stock's available float and only 2.4 days of trading at KHC's average pace.
On the options front, however, traders are starting to pile on puts. On the the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) Kraft's 10-day put/call volume ratio of 1.02 sits in the 76th percentile of its annual range. This suggests a healthier appetite than usual for these bearish bets of late.