Homebuilding giant Lennar Corp (LEN) is up 1.4% to trade at $105.28 at last check, inching back up toward its April 16 all-time high of $106.40. The equity’s recent pullback from that high was caught by the ascending 30-day moving average, and Lennar stock is now eyeing its third-straight day in the black as it rebounds. Plus, a historically bullish signal flashing could propel LEN toward a new all-time peak.
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According to a study from Schaeffer’s Senior Quantitative Analyst Rocky White, these recent highs come amid historically low implied volatility (IV) — a bullish combination for the security in the past. White’s study shows that there have been five other times in the past five years when the stock was trading within 2% of its 52-week high, while its Schaeffer’s Volatility Index (SVI) stood in the 20th percentile of its annual range or lower, as is the case with LEN’s SVI of 31%, which sits in just the third percentile of its 12-month range.
According to White’s data, Lennar stock enjoyed an average one-month return of 7.8% following these signals and was higher all five times. A move of similar magnitude would put the equity at a brand new record high of $113.49.
Furthermore, despite LEN’s recent highs, there is still plenty of pessimism amongst analysts, which could lead to price-boosting upgrades down the line. Of the 15 analysts in coverage, eight carry a tepid “hold” rating.
Some tailwinds could arise from a shift in the options pits as well. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), LEN’s 10-day put/call volume ratio stands in the 87th percentile of its annual range, indicating puts being picked up at a faster-than-usual rate of late.
