CLS has plenty of technical support in place
Subscribers to Schaeffer's Weekend Trader options recommendation service received this CLS commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.
Celestica Inc (NYSE:CLS) stock recently pulled back from all-time highs to its 20-day moving average. Since a post-earnings breakout above $64 in October, pullbacks to this trendline have presented intriguing buying opportunities. Plus, the security staged a bullish island reversal pattern in late January after reporting quarterly results, making now an ideal time to buy calls.
There are only of handful of brokerages covering CLS, but eight of the nine in question rate it a "buy" or better. This means there is still plenty of room for other analysts to chime in. Meanwhile, short interest is up 20.4% in the last two reporting periods and 57% since September, but still shares have rallied, pointing to technical strength. It would take these shorts nearly three days to buy back their bearish bets, at the equity’s average pace of daily trading.
Our recommended call option has a leverage ratio of 4.8 and will double on a 21.3% rise in the underlying equity.