Red Cat Holdings Inc (NASDAQ:RCAT) has dropped 4% from its record high, now at $8.79. The stock is close to the 260-day moving average and has a history of bouncing back. Short interest is high at 17.2%, indicating potential for a short squeeze.

The stock has historically been higher one month after similar signals, with an average gain of 29.7%. A premium-selling strategy may be a smart move going forward, as Red Cat stock’s Schaeffer’s Volatility Scorecard (SVS) is low at 15 out of 100, indicating lower volatility than expected.

Read more at Yahoo Finance: Defense Stock Due for a Rebound After Falling From Highs