While the short interest is decreasing, options traders have been more bearish on GTLB lately. The stock’s 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) now stands higher than 97% of readings from the past year, suggesting a more pessimistic tone in the options pits. Additionally, the security’s Schaeffer’s Volatility Index (SVI) of 82% stands higher than just 19% of all other readings in its annual range, meaning options players are pricing in relatively low volatility expectations for GitLab in the near term.
Nevertheless, shareholders of GTLB will be eagerly awaiting the company’s next earnings report, with analysts forecasting a loss of $0.16 per share for the first quarter. Bulls may take comfort in the fact that GitLab has a history of exceeding analysts’ earnings expectations, with the company surprising to the upside in three of the last four reports. The stock is currently trading below both its 30-day moving average and its 50-day moving average, but if history is any indication, a bounce off its 200-day trendline could be in the cards, potentially fueling a strong move to the upside.
Overall, with the short interest falling and a historically bullish trendline in play, investors may find some solace in the potential for a turnaround in GitLab stock. While options traders may be more cautious, historical data points to the possibility of a significant bounce from current levels. With the stock trading at levels not seen since early March, a return to previous highs could be on the horizon as the company looks to recover from its recent earnings and revenue outlook disappointment in the eyes of investors. Time will tell whether the bullish trendline will hold true once again for GitLab.
