JNPR shares have historically underperformed in the June-August period
Shares of network equipment specialist Juniper Networks, Inc. (NASDAQ:JNPR) have underperformed over the past year, shedding 7.6% to trade at $27.09. And while the equity has been on the rise in recent weeks since bouncing near the $24 in mid-April, a closer look at the charts, and other data on JNPR, suggests now is certainly not the time to be speculating on another move higher from the stock.
First of all, the aforementioned near-term rally from the security put it in overbought territory, according to its 14-day Relative Strength Index (RSI). This indicator broke above the 70 mark, signaling overbought conditions, back on May 9 and it's held close to there since. Not only that, but the 320-day moving average -- one of our favorite moving averages -- has been acting as a ceiling, and this is occurring just below the late-January bear gap, hinting at a potentially formidable layer of technical resistance.
If all that isn't bad enough, JNPR is heading into what's historically been a bearish time of year. In fact, data from Schaeffer's Senior Quantitative Analyst Rocky White shows it's been one of the worst S&P 500 stocks to own from June through August, averaging a loss of 6.6% over the past 10 years, closing the three-month period in positive territory just three times during that time.
Despite this, options traders have seemingly been quite bullish, with more than five calls bought to open for every put during the past 10 days at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). In a similar vein, Juniper Networks' Schaeffer's put/call open interest ratio (SOIR) is 0.21, which aside from showing call open interest among contracts expiring within three months heavily outweighs put open interest, sits as an annual low. As such, an unwinding of this unusual call-skew could be another headwind for the shares.
And it's not even like JNPR has been a good name for premium buyers to target. Specifically, the security's Schaeffer's Volatility Scorecard (SVS) is only 9 (out of a possible 100), meaning it's tended to fall short of options traders' volatility expectations over the past year.