Canadian Solar stock is flashing a bull signal that could send it flying past today's high
The shares of Canadian Solar Inc. (NASDAQ: CSIQ) are up 0.9% to trade at $26.94 this afternoon, after hitting a nearly five-year high of $27.28 earlier today. And while the solar energy company already sports a 39.3% quarter-to-date lead, with support from the 10-day moving average, more upside may be on the horizon, too. This recent peak comes amid historically low implied volatility (IV), which has been a bullish combination for CSIQ in the past.
According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there has been only one other time in the past five years when the stock was trading within 2% of a 52-week high, while its Schaeffer's Volatility Index (SVI) sat in the 20th percentile of its annual range or lower -- as is the case with CSIQ's current SVI of 54.3%, which sits just above the 15th percentile of its 12-month range. The data shows that one month after this signal, the security was higher, averaging a one-month return of 21.1%. From its current perch, a move of similar magnitude would put CSIQ above the $32 mark, a landmark that has not been reached since 2015.
Analysts are mostly optimistic toward CSIQ, with two of the three in coverage sporting a "strong buy" rating, and only one carrying a tepid "hold." Meanwhile, the stock's 12-month consensus price target of $28.36 is a 5.6% discount to current levels.
This upbeat sentiment is echoed in the options pits, where calls are preferred. The security sports a 50-day call/put volume ratio of 14.66 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the 92nd percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets of late.