Insurance stock Prudential Financial Inc (NASDAQ:PRU) was last seen down 0.4% to trade at $107.97, looking to snap its five-day win streak. PRU has struggled long term, down 8.8% so far this year and trapped in a channel between $110 and $100. The stock has attempted several breakouts, but a historically bearish signal is already coming into play.
Per Schaeffer's Senior Quantitative Analyst Rocky White, PRU is within 0.75 of the 260-day moving average's 20-day average true range (ATR), after remaining below it 80% of the time in the past two weeks and within 2% of the trendline. This signal has occurred six other times over the past five years, after which the stock was lower one week later 67% of the time with an average loss of 2.5%. A fall of this magnitude would put the shares near $105.
Options are looking affordable, per the stock's Schaeffer's Volatility Index (SVI) of 22%, which ranks in the 7th percentile of its annual range. Plus, PRU's Schaeffer's Volatility Scorecard (SVS) comes in at 16 out of 100. The security has consistently realized lower volatility than its options have priced in, making it a premium selling candidate.
