Electrical hardware stock CLS has technical support in place ahead of earnings
Celestica Inc (NYSE:CLS) stock is up 6.9% to trade at $88.48 today, enjoying broad market tailwinds and both RBC Capital and CLS Globe maintaining their "outperform" ratings. The Canada-based electrical hardware firm steps into the earnings confessional Friday morning, and could be poised for an even bigger move on the charts.
CLS shook off two price-target cuts this week to break out of a channel of lower lows since a Feb. 5 record high of $144.27. The shares are 4.3% lower in 2025, but still boast a 101% gain in the last 12 months. The equity also has support at its 320-day moving average, a trendline that caught the pullback earlier this month.
Celestica has a history of volatile post-earnings moves. The stock gapped higher by 13.6% after an upbeat report in January, and by 18.2% after October's report. Overall, the stock averages a post-earnings move, regardless of direction, of 8% the day after the last eight reports. This time around, the options market is pricing in a larger-than-usual post-earnings move of 16.6%, regardless of direction.
Options traders have been skewed more toward puts lately. CLS' Schaeffer's put/call open interest ratio (SOIR) of 0.74 that sits in the 98th percentile of annual readings. In other words, short-term traders have been more bearish than usual, and a further unwinding of this pessimism could boost the shares.
Celestica has also outperformed options traders' volatility expectations over the last 12 months, making this an excellent opportunity to weigh in with options. This is per its Schaeffer's Volatility Scorecard (SVS) of 81 out of 100.