ALLY stock has exploded higher with breakaway gap ups after forming a Three Outside Up candlestick pattern.

Ally stock explodes higher with breakaway gap ups.

There was three huge dark pool prints for on September 9, 2019:

Three large dark pool trades in ALLY stock that collectively represented 45% of the daily trading volume average on September 9, 2019.

The dark pool trades look like buy orders because of the bullish options flow in the stock:

The $35 strike call options in ALLY stock traded heavily on September 9, 2019.

On July 19, 2019, BTIG analyst Giuliano Bologna raised his price target on Ally Financial to $39 and kept his Buy rating after its Q2 earnings beat and announced $1.25B stock buyback program. The analyst notes that the company’s new retail auto origination yields have increased to 7.6%, and the mix shift toward used vs. new car loan originations is expected to generate better risk adjusted returns over the next few quarters.

On September 9, 2019, Stephens analyst Vincent Caintic upgraded Ally Financial to Overweight from Equal Weight and raised his price target for the shares to $44 from $37. The company should be able to maintain or increase auto yield as it increases its application funnel, with dealers such as Carvana, CarMax, Fair, Caintic tells investors in a research note.

Revenue has been growing a respectable 2.3% over the last 5 years.

The valuation on ALLY stock is excellent. The stock trades with a P/E of 8.75 and a Forward P/E of 8.15. It has an excellent PEG Ratio of 0.50, and an ok P/S of 1.39. What’s crazy is that ALLY stock is trading for below book value!

We are not adding ALLY stock to the long-term buy and hold GST Portfolio because it’s already ran up so much over the last 4 days. However, a short-term momentum trade may be a good gambit for readers. With heavy dark pool activity and bullish options flow, the stock likely has more upside left.

Disclosure: We do not hold any position in ALLY stock.