Bank Stock Pullback Presents Buying Opportunity

Barclays PLC (NYSE:BCS) stock was last seen down 1% at $24.25, heading for its third-straight drop and pulling back further from its Aug. 6 15-year high of $28.68. Support at the 260-day moving average is keeping losses in check, however, and may serve as the springboard for an upswing. 

Per Schaeffer's Senior Quantitative Analyst Rocky White, BCS has traded within 0.75 times the 260-day moving average's 20-day average true range (ATR), after spending at least 80% of the previous two weeks above the trendline. This setup has occurred four other times over the last decade, after which the stock was higher one month later 75% of the time, averaging a 10.3% gain. 

Furthermore, BCS' 14-day Relative Strength Index (RSI) of 31.3 sits on the cusp of "oversold" territory, suggesting the shares could be due for a short-term bounce.

For those looking to weigh in, options look like a good way to go. The equity's Schaeffer's Volatility Index (SVI) of 28% sits in the 15th percentile of its annual range, meaning options traders are pricing in low volatility expectations.