Things have not been looking good for DISH Network Corp (NASDAQ:DISH) stock of late. Although the broadcasting name has bounced since hitting a seven-year low of $23.22 on Dec. 27, it's historically been one of the worst stocks to own during Martin Luther King Jr. Day week in the past 10 years, averaging a loss of nearly 3%. What's more, the equity is flashing yet another historically bearish indicator, suggesting DISH may be due for a short-term drop.
DISH is headed south today, down 1.8% at $29.26, set to break a four-day rally that put it back within one standard deviation of its 70-day moving average, after a lengthy stretch below it. In the past two years, the media concern has run into this trendline five times, and was lower one month later four of those five times. According to Schaeffer's Senior Quantitative Analyst Rocky White, the shares lost an average of 7.21% a month after these run-ups. At current levels, a similar loss would push the security back toward $27.15.
The majority of analysts following DISH stock aren't betting on a comeback either, with four doling out a "hold," and two giving it a "sell" or worse rating. However, there's still plenty of room for downgrades --with five analysts maintaining a "strong buy" rating, and the consensus 12-month price target of $48.18 representing a 65% premium to current levels.
In the options pits, it appears that bears have been piling on DISH Network recently. DISH sports 10-day put/call volume ratio of 5.11 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio means that traders have bought to open more than five DISH puts for every call in the past two weeks. Plus, the ratio sits in the high 84th percentile of its annual range, implying that puts have rarely been more popular in the past year.
Plus, with DISH Network's earnings not expected until mid-February, it might be a good time to speculate on the stock's next move with relatively cheap short-term options. Specifically, the stock's Schaeffer's Volatility Index (SVI) of 40% stands higher than only 15% of all other readings from the past year, indicating that near-term options are pricing in relatively low volatility expectations.