The shares of Align Technology, Inc. (NASDAQ:ALGN) are down 0.7% to trade at $309 today, after the Invisalign parent terminated a development and distribution agreement with Straumann Group. Nevertheless, ALGN is flashing a bullish signal that points to a rally as soon as next week, if history is any indicator.
Diving right in, Align Technology stock made the list of 25 best stocks to own the week of Fed policy meetings, according to Schaeffer's Senior Quantitative Analyst Rocky White. Looking at data since 2015 with at least 25 returns to be considered, ALGN sports an average one-week return of 1.1% and was positive 69% of the time the week of Fed policy meetings. That's good for sixth best out of the 25 stocks profiled, and best in its sector of healthcare equipment services.
A 1.1% bump next week would mean a third straight weekly win for ALGN. The $330 level rejected the shares back in May, but the subsequent pullback found support at their 80-day moving average. Year-to-date, the medical device stock is up 47%, and May has been its only negative month in 2019 thus far.
Traders should consider short-term options, which can be had for a bargain at the moment. The equity's Schaeffer's Volatility Index (SVI) of 37% is in the 23rd percentile of its annual range, suggesting near-term options are pricing in relatively low volatility expectations for ALGN shares. In addition, the stock's Schaeffer's Volatility Scorecard (SVS) stands at 86 (out of a possible 100), indicating the shares have handily exceeded options traders' volatility expectations in the past year.