The shares of Philip Morris International Inc. (NYSE:PM) had set a series of lower highs following a late-April bear gap, and bottomed out at an eight-year intraday low of $64.67 on Dec. 27. The stock has since rallied over 23% and is now revisiting the $80 level -- a region of support for PM prior to its mid-December spiral. However, the Marlboro parent just ran into likely trendline resistance, which could send PM stock back down the charts, if history is any indicator.
Specifically, the security closed Monday within one standard deviation of its 200-day moving average -- a signal that has flashed six times before. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, the stock averaged a one-month loss of 5.1% after these prior signals, with 83% of returns negative. A similar move would knock PM stock from its current perch at $80.39 to $76.29 over the next month.
Now might be the time to speculate on PM's next leg lower with put options, based on these historical returns. The security's Schaeffer's Volatility Index (SVI) of 21% stands higher than just 22% of other such readings from the past year, implying that near-term options are pricing in relatively low volatility expectations.
It looks like bears are already piling on PM stock, too. The security sports a 10-day put/call volume ratio of 1.11 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 96% of all other readings from the past year. This hints at a much healthier appetite for puts over calls of late.
Should the stock reverse course, a round of analyst downgrades could leave PM vulnerable to even more headwinds. Currently, nine of the 14 analysts following the stock consider it a "buy" or better. Plus, the consensus 12-month target price of $87.47 still stands at a nearly 9% premium to current levels.