The shares of InVitae Corp (NYSE: NVTA) are down 7.6% to trade at $34.23 at last check, just one day after hitting a record high of $37.20. And while the security is already enjoying an impressive 112% year-to-date lead, with support from the 20-day moving average, more upside may soon be on the horizon. Also lending a hand looks to be the fact that the stock's recent peak comes amid historically low implied volatility (IV), which has been a bullish combination for NVTA in the past.
According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there have only been two other times in the past five years when the stock was trading within 2% of a 52-week high, while its Schaeffer's Volatility Index (SVI) sat in the 20th percentile of its annual range or lower -- as is the case with the equity's current SVI of 70.6%, which sits slightly above the 8th percentile of its 12-month range. The data shows that half of the time, the security was higher a month later, averaging a return of roughly 12% for that time period. From its current perch, a move of similar magnitude would put NVTA just above the $38 mark, at yet another record peak.
Analysts are particularly optimistic toward the equity, with five of the six in coverage carrying a "strong buy" rating, while only one sports a tepid "hold." Meanwhile, the stock's 12-month consensus target price of $35.81 is a 4.7% premium to its current perch.
A short squeeze could fuel additional gains. Short interest is down 6.7% in the most recent reporting period, yet the 20.17 million shares sold short make up roughly 21.2% of the stock's available float, or more than a week's worth of pent-up buying power.
That upbeat sentiment is echoed in the options pits, where there is an appetite for calls. InVitae stock sports a 50-day call/put volume ratio of 5.64 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 88th percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets of late.