The shares of communications and networking concern Juniper Networks, Inc (JNPR) looks like they reached their peak late last month, coming in at a nearly three-year high of $29.77 on Aug. 25, notes Lillian Currens, deputy editor of Bernie Schaeffer's advisory service, Schaeffer's Investment Research.
While the security quickly cooled from here, a leg of support looks to have emerged at the $28 level, while the stock also pulled back to a historically bullish moving average, which could mean now is the time to bet on JNPR's next move higher.
Specifically, JNPR just came within one standard deviation of its 80-day moving average after a lengthy period above the trendline. According to a study from Schaeffer's Senior Quantitative Analyst Rocky White, five similar pullbacks have occurred in the past three years.
One month after these signals, Juniper Networks stock was higher 80% of the time, and averaged a return of 4.6% in that time period. From its current perch at $28.17, a similar move would put the stock just below the $30 level, marking a fresh multi-year high.
Short interest has been falling, off 19.4% in the last reporting period, but there's still plenty of pessimism to be unwound. The 16.34 million shares sold short make up 5.1% of the stock's current available float, and it would take a little over a week to cover these bearish bets, at the equity's average daily pace of trading.
The stock is ripe for a round of analyst upgrades, too. Of the 11 covering JNPR seven call it a "hold" or worse. Plus, the 12-month consensus price target of $27.59 is a 2.1% discount to current levels.
In the options pits, short-term options traders haven't been more put-biased in the past year, and a shift in sentiment here could put additional wind at the stock's back. This is per JNPR's Schaeffer's put/call open interest ratio (SOIR) of 0.72, which stands higher than all other readings from the past year.