Chewy Stock Well-Positioned to Make a Comeback

Chewy Inc (NYSE:CHWY) stock has been trending lower since its June 6, two-year high of $48.62, but maintains a healthy 51.3% year-over-year lead. A rebound might soon be in the cards, too, as the security is now trading within striking distance of a historically bullish trendline.

Per Schaeffer's Senior Quantitative Analyst Rocky White, Chewy stock's recent pullback placed it within one standard deviation of its 260-day moving average. The equity was above this trendline in at least eight of the last 10 trading days, and spent 80% of the past two months above it.

Within these parameters, three other signals occurred over the last three years, after which the stock was higher one month later 67% of the time, averaging a 6.9% gain. From its current perch at $34.49, a similar move would place the security back above $36.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), CHWY's 50-day put/call volume ratio ranks higher than 90% of annual readings. This suggests a sentiment shift could create additional tailwinds. 

Options look affordably priced, making this an excellent time to bet on the equity's next moves. This is per its Schaeffer's Volatility Index (SVI) of 41%, which stands in the 14th percentile of readings from the past year.