Retail stocks on track for new highs

Williams-Sonoma, Inc. (Williams) -Sonoma Inc (math.) genus(NYSE:WSM) Following the March 13th earnings release, the stock hit back-to-back new highs, creating a huge bull gap on the chart. Looking further ahead, WSM has risen in seven of the last eight weeks and is now up over 162% in the last 12 months.

It last rose 0.4% at $318.77 and touched an all-time high of $319.78 earlier today, but investors shouldn't call a top just yet as a flashing bullish signal suggests there's still room for Williams-Sonoma shares to rise.

WSM's recent highs have come at a time of historically low implied volatility (IV), as its 20% Schaeffer's Volatility Index (SVI) is in the lower 1st percentile of its annual range. According to Schaeffer's Senior Quantitative Analyst Rocky White, WSM has had six signals in the last five years where it traded inside the 52-week high of 2% and its SVI was in the 20th percentile or lower of its annual range, which is the case now.

One month after these signals, 83%'s time share price would move higher, by an average of 7.6%. a similar move would take the stock to a new all-time high near $343.

The stock is also ripe for shorting. The 6.2 million shares currently sold short represent 10.3% of WSM's outstanding shares, which is comparable to the suppressed buying power of the last six days.