Signal Says This Software Stock Could Soon Break Out

UiPath Inc (NYSE:PATH) stock is experiencing a potential breakout after a period of consolidation, according to a historically bullish signal. Senior Quantitative Analyst Rocky White from Schaeffer's indicates that PATH has traded within 0.75 times the 260-day moving average's 20-day average true range (ATR) after spending most of the past two weeks and 42 trading sessions above the trendline.

This pattern has occurred twice in the past decade, leading to a 7.8% average gain for the stock one month later. Currently, PATH is trading above $13.53, just below the $14 threshold, which could be reached if the breakout continues. Options traders have been cautious, with a 50-day put/call volume ratio above 86% of annual readings and a put/call open interest ratio (SOIR) above 91% of readings from the past year.

Shorts have been retreating, dropping 14.9% in the last two reporting periods. With bearish sentiment potentially unwinding, PATH could attract upgrades from brokers, currently holding 18 out of 20 with a hold or sell recommendation. Additionally, options on PATH are affordably priced, with a Schaeffer's Volatility Index (SVI) of 57%, placing it in the 14th percentile of its annual range.