Oatly is one of those stocks that makes people roll their eyes. It was a hype darling, then it became a cautionary tale, and for a while it felt like every rally existed just to be sold into. That’s exactly why the current setup matters.
Thesis: OTLY is setting up for a tradable comeback that the market still isn’t pricing in. Not because the fundamentals suddenly became pristine (they haven’t), but because the stock is drifting into an “everyone already knows the bad news” zone. When that happens, a small catalyst can move price a lot.
At ~$10.67, Oatly is sitting far below its 52-week high of $18.84 (08/26/2025) and above its 52-week low of $6.00 (02/12/2025). That range tells you two things: investors have been willing to pay up when sentiment turns, and the downside has already been explored in a real way. If you’re going to take a swing at a beaten-up consumer brand, this is the kind of tape you want: disliked, not dead.
What makes this actionable today is the combination of (1) a stock trading under key moving averages, (2) cooling momentum indicators that can flip quickly, and (3) a short base that has been shrinking into year-end. That’s a recipe for sharp mean reversion when buyers show up.
What Oatly does, and why the market should care
Oatly Group AB develops and sells oat-based dairy alternatives. It’s still the name brand in oat drink mindshare, even as competition has intensified. The company operates across three geographic segments: Europe & International, North America, and Greater China, with headquarters in Malmö, Sweden, and about 1,482 employees.
The market cares because this is a branded consumer product business living inside a category that continues to expand. A recent industry forecast pegged the global protein alternatives market growing from $28.86B in 2025 to $76.85B by 2032, implying a 15.06% CAGR (published 01/13/2026). You don’t need Oatly to “win everything” for the stock to work. You need the brand to remain relevant and for investors to believe the company can stabilize its economics enough to justify a higher multiple than “perpetual turnaround.”
In other words, OTLY doesn’t have to become a perfect business to be a good trade. It just has to become less hated.
Where the stock is right now (price action + technical context)
OTLY closed previously at $11.01 and is currently around $10.67, a -2.73% move on the day. Volume is light at roughly 40,497 shares, below the ~56k to 60k average volume measures shown for the past month and two weeks. Light volume dips often matter because they suggest selling pressure isn’t necessarily a flood of new information. Sometimes it’s just absence of buyers.
The more important piece is trend positioning:
- 10-day SMA: ~11.14
- 20-day SMA: ~11.23
- 50-day SMA: ~11.71
- 9-day EMA: ~11.03
- 21-day EMA: ~11.24
- 50-day EMA: ~11.97
With the stock at ~$10.67, OTLY is below basically every commonly watched moving average here. That’s the bearish case in one sentence. But it’s also why the upside can be sharp if the stock simply reverts to its “normal” trend lines. Mean reversion trades work best when the goal is modest: reclaim the 9/21-day area, then challenge the 50-day.
Momentum is still negative, but not screaming “new leg down”:
- RSI: ~41.5 (not oversold, but no longer overbought either)
- MACD: bearish momentum (histogram slightly negative)
That’s a stock that can pivot if it stops making new lows and starts closing above short moving averages. If that happens, short covering plus fresh buyers can do the rest.
Positioning: the short base is shrinking
This is the part that makes the “comeback” angle more than vibes. Short interest has declined materially into year-end:
| Date | Short Interest | Avg Daily Volume | Days to Cover |
|---|---|---|---|
| 08/15/2025 | 1,329,172 | 149,079 | 8.92 |
| 09/15/2025 | 1,263,509 | 76,846 | 16.44 |
| 09/30/2025 | 1,142,121 | 76,391 | 14.95 |
| 10/31/2025 | 796,935 | 140,987 | 5.65 |
| 12/31/2025 | 464,638 | 80,715 | 5.76 |
Short interest dropping from ~1.33M (08/15/2025) to ~464k (12/31/2025) is not a small change. Bears have been taking risk off. That does two things:
- It reduces the “constant sell pressure” that can smother rallies.
- It sets a cleaner stage for a sentiment-driven bounce, because the marginal seller may be exhausted.
Counterpoint: less short interest also means less fuel for a classic squeeze. I’m not pitching this as a squeeze trade. I’m pitching it as a re-rating/mean reversion trade where improving positioning is a supportive backdrop.
Valuation framing: small cap, high expectations baked into the balance sheet multiple
At a market cap of roughly $323.6M, OTLY is trading like a small-cap consumer turnaround with limited investor patience. The stock shows a negative P/E (-1.44), so earnings-based valuation isn’t the right tool here.
What jumps out is the price-to-book around 17.41x. That’s elevated on its face and will make value-oriented investors flinch. But high P/B in a branded consumer name can happen when book value is not a great proxy for brand equity, distribution footprint, or future margin potential. The market is effectively saying: “We don’t trust the earnings, and we’re not paying up for the turnaround.” That skepticism is precisely what can create upside when the narrative shifts even modestly.
Also worth noting: OTLY is still far under its own recent high watermark. A move from ~$10.67 back to the $13-$14 zone doesn’t require heroic assumptions. It mostly requires the market to stop treating every bounce as a gift to sell.
Catalysts (what could flip sentiment)
- Category tailwinds stay in the headlines. The protein alternatives market forecast (01/13/2026) reinforces a growth narrative that can lift “category leaders” even if company-specific numbers aren’t perfect.
- Brand and product momentum. Oatly has been leaning into beverage taste and health trends, including fiber-focused nutrition and evolving matcha trends (report highlighted 10/16/2025). If retailers and foodservice partners respond, the market may start looking through near-term noise.
- Technical reclaim of key averages. A sustained move back above the 9-day and 21-day EMAs (~$11.03 and ~$11.24) is often enough to pull in momentum traders, particularly in smaller caps.
- Positioning continues to normalize. If short interest keeps shrinking while price stabilizes, the “bearish consensus” weakens, and you tend to see sharper reactions to any incremental good news.
The trade plan (actionable)
This is a long trade idea designed to capture a bounce back toward trend levels. I’m treating it as a mid term (45 trading days) setup. That window matters because (1) the stock is below multiple moving averages and needs time to repair, and (2) the upside targets are tied to mean reversion, not a one-day headline spike.
- Entry: $10.67
- Target: $13.20
- Stop loss: $9.60
Why these levels: $13.20 is a realistic reversion target that would put OTLY back in the zone where the market starts to believe “maybe the worst is over,” without requiring a return anywhere near the $18.84 52-week high. The $9.60 stop is below the psychologically important $10 area and gives the trade room to breathe while still defining risk.
How I’d manage it: if OTLY closes back above the ~$11.24 21-day EMA and holds, I’m more comfortable letting it work. If it chops around under $11 for weeks, that’s a sign the bounce thesis is early or wrong, and I’d keep risk tight.
Risks and counterarguments (don’t ignore these)
- The trend is still down. OTLY is below the 10/20/50-day averages and MACD momentum is bearish. This could easily be a failed bounce that rolls over.
- Profitability is not here yet. The negative P/E is a reminder that this is not a clean earnings compounder today. If the market rotates hard toward profitable defensives, stories like this can get sold.
- Liquidity can be thin. Recent volume around ~40k shares is not robust. Thin liquidity can widen spreads and make stops feel “slippery” in fast markets.
- Valuation optics can repel buyers. A ~17x price-to-book ratio is a headline number that some investors will use to dismiss the stock outright, even if it’s not the best metric for a brand-led business.
- Corporate actions can create confusion. The ADR ratio change announced 01/31/2025 (a one-for-twenty reverse ADR split effect for ADR holders) can sometimes leave lingering perception issues, even long after the event.
Counterargument to the thesis: The short interest has already come down a lot, which can be read as “the easy bearish money has already been made.” If the stock can’t rally even after shorts reduce exposure, maybe the real problem is simply lack of organic demand for the shares. That’s a fair critique, and it’s why I want a defined stop and a realistic target rather than swinging for $18+.
Conclusion: I like the asymmetry, but I’m not marrying it
OTLY looks like a stock the market still treats as damaged goods, sitting at ~$10.67 with momentum indicators muted and the chart below key averages. And yet, the positioning picture is quietly improving, the category narrative remains supportive, and the stock has plenty of room to mean-revert without requiring a miracle turnaround.
I’m long with a mid term (45 trading days) mindset: risk defined at $9.60, looking for $13.20 as the “comeback nobody is pricing in” move.
What would change my mind: a clean break and failure to reclaim $10 that holds (especially on rising volume), or repeated rejection beneath the 21-day EMA area (~$11.24) that signals the market is still in “sell every bounce” mode. If either happens, the trade thesis is wrong, and I’d rather step aside than rationalize.