Dynatrace (DT) is up 2.5% to trade at $47.48, at last check, enjoying a breath of fresh air following an early February bear gap that dragged its shares back below $50. In fact, the security has struggled to maintain any upwards momentum in 2024, off nearly 10% in this time frame, particularly suffering after hitting a ceiling at its Feb. 4, two-year high of $61.41. Today’s jump may be the turn of a new leaf, however, as DT is trading near a historically bullish trendline on the charts.
Dynatrace stock has come within one standard deviation of the 260-day moving average, after spending the majority of the past five years above it. Per Schaeffer’s Senior Quantitative Analyst Rocky White, DT saw four similar pullbacks during this time frame, which resulted in an average one-month return of 12%. Based on its current perch, a surge of this magnitude would put the IT name back near the $54 mark.
Digging deeper, short sellers are retreating, which could be another bullish signal for Dynatrace stock. Despite climbing 20% during the past two reporting periods, short interest only rose 7.3% during the past two weeks. This accounts for 2.8% of the stock’s total available float, and would take less than three days for shorts to buy back.
Lastly, options are looking affordable, per the stock’s Schaeffer’s Volatility Index (SVI) of 31%, which ranks in the relatively low 18th percentile of its annual range.