Samsara Inc. (NYSE:IOT) traded at $33.60, up 0.4% at last check, but remains 23% lower compared to a year ago. The stock has fallen for five consecutive weeks since reaching $45.60 on Dec. 5.
The recent declines have brought the software stock near its 40-month moving average, a trendline it has closed above for the past five months. According to Schaeffer's Senior Quantitative Analyst Rocky White, this signal has occurred twice in the last 20 years. Each time, the equity was higher one month later with an average gain of 20%. Three months later, the security averaged a 66.7% increase with a 100% win rate.
Short interest rose 3% in the most recent reporting period, with 23.51 million shares sold short accounting for nearly 7% of IOT's total available float. At the stock's average trading pace, it would take nearly a full trading week for shorts to cover their positions.
Options traders are pricing in low volatility expectations, as Samsara's Schaeffer's Volatility Index (SVI) of 42% ranks in the low 14th percentile of annual readings. The stock's Schaeffer's Volatility Scorecard (SVS) is 70 out of 100, indicating it has consistently realized higher volatility than options have priced in.