CCI Could Climb to Record Highs Says Bull Signal

An unwinding of pessimism in the options pits could act as a tailwind as well

Deputy Editor
May 25, 2021 at 3:12 PM
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Real estate investment trust (REIT) Crown Castle International Corporation (NYSE:CCI) is just barely out of reach of its recent April 30 record high of $189.59, up 0.8% to trade at $187.72 at last check -- earlier up as high as $188.56. The stock has been climbing on the charts since its pullback from that all-time high was captured by the 40-day moving average. Now, there is reason to believe CCI could soon extend its rally.

More specifically, today's peak comes amid historically low implied volatility (IV), which has been a bullish combination for CCI in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been another four times in the past five years when the security was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) stood in the 20th percentile of its annual range or lower. This is now the case with Crown Castle stock's SVI of 19%, which sits in the low 4th percentile of its 12-month range.

White's data shows that a month after these signals, the security was higher 75% of the time, averaging a 4.3% return for that time period. From its current perch, a move of similar magnitude would put CCI above $195 -- a fresh record high. 

CCI 0525

A shift in sentiment in the options pits could push the security higher as well. CCI sports a 10-day put/call volume ratio of 3.24 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 97% of readings from the past year, showing puts being picked up at a much faster-than-usual rate. 

Today is showing a similar penchant for puts. So far, 1,028 puts have crossed the tape, which is double the intraday average. Most popular is the July 170 put, where new positions are being opened. 

 

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