Schaeffer's Trading Floor Blog

Biggest Movers: Canadian Solar Inc., SolarCity Corp, and Cliffs Natural Resources Inc

CSIQ, SCTY, and CLF are making big moves in Thursday's trading

by 6/26/2014 2:59 PM
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Heading into the final hours of today's session, three of the top market movers are alternative energy concerns Canadian Solar Inc. (NASDAQ:CSIQ) and SolarCity Corp (NASDAQ:SCTY), plus mining company Cliffs Natural Resources Inc (NYSE:CLF). Here's a quick roundup of how this trio of names is performing on the charts so far.

CSIQ is up 4.2% today to linger near $29.72, after this morning entering an Engineering, Procurement, and Construction (EPC) agreement with Kingston Solar LP for the construction of a 40 megawatt (MW) DC (100 MW AC) utility-scale solar energy farm in Canada. Call players have responded enthusiastically to the news, picking up contracts at a rate that more than doubles the average intraday norm. Today's preference for calls over puts echoes a longer-term options trend on Canadian Solar Inc., as the equity sports a 20-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 4.77, with nearly five times as many calls as puts being bought to open during the last month. Elsewhere, short interest increased by more than 35% during the last two reporting periods, and now accounts for 10.1% of CSIQ's available float. As such, it is possible some of the recent option bulls are actually short sellers in disguise, hedging against additional upside.

SCTY reached a three-month peak of $72.10 today, and at last check, was trading 2.7% higher at $70.87. Similar to CSIQ, SolarCity Corp saw an 11.7% spike in short interest during the two most recent reporting periods, and now these bearish bets make up more than one-fourth of the equity's available float. Looking back on the charts, SCTY has gained 37.3% since the start of June, and a continuation of this upward trajectory may cause a short-squeeze scenario, which could translate into additional tailwinds.

CLF has surged 3.9% today to $14.93, after the company issued an open letter urging shareholders to reject the slate of directors proposed by Casablanca Capital. Subsequently, Cliffs Natural Resources Inc saw a spike in call volume today, which short sellers -- picking up insurance against more upside -- may have contributed to. Currently, 35.8% of the stock's float is sold short, and it would take roughly nine sessions to cover these bearish bets, at the shares' average daily volume.

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