Long-Term Bullish Signal Hasn't Failed Samsara Stock

Industrial Internet of Things (IIoT) platform Samsara Inc (NYSE:IOT) is up 0.4% to trade at $33.60 at last check, but carries a 23% year-over-year deficit. Since trading as high as $45.60 on Dec. 5, the shares have preceded to rattle off five straight weekly losses. The good news, though, is that these recent losses have the software stock testing a historically bullish long-term trendline.

 

IOT is within 3% of its 40-month moving average, after closing above this trendline for the past five months. Per Schaeffer's Senior Quantitative Analyst Rocky White, this signal has occurred twice during the last 20 years, after which the equity was higher one month each time with an average 20% gain. Three months later, the security averaged a 66.7% pop with a 100% win rate.

Keep an eye on a short squeeze as well. Short interest is up 3% in the most recent reporting period, and the 23.51 million shares sold short accounts for nearly 7% of IOT's total available float. At the stock's average pace of trading, it would take nearly a full trading week for shorts to buy back their bearish bets.

Options are a good weigh to speculate on Samsara stock's next moves, as its Schaeffer's Volatility Index (SVI) of 42% ranks at the low 14th percentile of annual readings. This means options traders are now pricing in low volatility expectations. Additionally, with a Schaeffer's Volatility Scorecard (SVS) of 70 out of 100, the security has consistently realized higher volatility than its options have priced in.