Canadian Solar stock could retest multi-month highs next month
The shares of Canadian Solar Inc. (NASDAQ:CSIQ) are up 0.4% to trade at $41.64 this afternoon but are well below their Aug. 18, 18-month highs of $47.69. Though the solar energy stock has shed 8.4% this month, if past is precedent, a return to multi-month highs could be imminent.
According to Schaeffer's Senior Quantitative Analyst Rocky White's latest study, Canadian Solar stock is now within one standard deviation of its 40-day moving average. The security has seen four similar signals over the last three years, and was higher one month later 75% of the time, averaging a 3.6% gain for that period. A comparable move from its current perch would place it back above the $43 level.
Analysts are split on their recommendations for CSIQ, with three of six in coverage sporting a "strong buy" rating against two "hold" ratings and one "sell." Plus, the stock's 12-month consensus price target of $44.17 is a 6.1% premium to current levels. And among short sellers, short interest represents 7.4% of the stock's available float, and it would take three days to cover, at the stock's average pace of trading.
There could also be an unwinding of pessimism among options traders. This is per the security's Schaeffer's put/call open interest ratio (SOIR) of 0.91, which ranks higher than 93% of annual readings.
Options look like an attractive route, as premiums look to be affordable right now. Canadian Solar stock's Schaeffer's Volatility Index (SVI) stands higher than just 30% of readings from the past 12 months, meaning these traders are pricing in low volatility expectations right now.