Software Stock Rally Could Be Short-Lived Says Signal

Shares of MongoDB Inc (NYSE:MDB) are up 2.8% to trade at $341.36 the software concern paces for a fourth-straight win. The stock is extending its rebound off the $300 level, an area of historic support. Year to date, however, the shares are down 17% while a historically bearish signal has emerged. 

MDB sports a 50-day call/put volume ratio of 1.78 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 90% of readings from the past year. There have been seven instances in the last three years that the equity's 50-day buy-to-open call/put ratio crossed over 1.0 and moved into the 90th percentile.

Per Schaeffer's Senior Quantitative Analyst Rocky White, the fintech name was higher one month later only 43% of the time after these signals, averaging an 4.2% loss. A move of similar magnitude would place the stock at $327 -- below the supportive $330 mark.