Shorts Still After Outperforming Ollie's Bargain Outlet

Ollie's Bargain Outlet is nearing record-high territory

Retail chain Ollie's Bargain Outlet Holdings Inc (NASDAQ:OLLI) is moving higher this afternoon, last seen up 0.2%, at $95.32. The shares earlier this week received a Morgan Stanley's price-target hike to $86 from $79, which sent OLLI's year-to-date gain above 43%. In fact, the stock rallied its way to an all-time peak of $97.98 on Wednesday. Below, we will take a look at recent data from Schaeffer's Senior Quantitative Analyst Rocky White, which suggests Ollie's stock may be ready for another record-breaking surge.

Looking further, Ollie's Bargain Outlet's short-term option premiums look relatively inexpensive at the moment. This is per the security's Schaeffer's Volatility Index (SVI) of 30%, which stands in the low 4th percentile of its annual range. In other words, near-term options are pricing in relatively low volatility expectations.

Since 2008, there have been four other times OLLI shares were within 2% of a 52-week high and simultaneously sported an SVI in the bottom 20% of its annual range. After those signals, the stock was higher one month later 100% of the time, averaging a gain of 7.14%, according to data from White. Another surge of this size would put the shares at $102.12 -- a fresh record high.

Lastly, short interest has seen a surge of 26.4% during the past two reporting periods on Ollie's stock. These bearish bets now account for nearly 9.6% of the stock's total available float, or just over five days of pent up buying power for shorts, going by average daily trading volume.